Observer Lite: 3/19/2025

Cleaning house
As part of its late February release of 4Q2024 earnings, Driven Brands Holdings (NASDAQ: DRVN) announced the sale of its U.S. car wash business to Whistle Express Car Wash for $385 million with a 2Q2025 expected closing.

In 2024, DRVN’s domestic car wash business generated ~$50 million of adjusted EBITDA, representing a ~8x sale multiple per the earnings call commentary.

Formerly known as Magnolia Wash Holdings, Whistle Express is owned by affiliates of Oaktree Capital Management and A&M Capital Partners. Per reports, upon closing of the acquisition, the platform will operate 530 locations across 23 states, making it the largest express car wash company in the U.S.

Perhaps most interesting, the deal consideration includes $120 million (or more) of sale/leaseback proceeds in addition to a $130 million seller note (interest rate of 13%, 15%, and 17% for years one, two, and thereafter).

Per disclosures, “…concurrently with the execution of the Purchase Agreement, [Whistle Express] entered into a purchase and sale agreement with a real estate investment trust for the sale of certain car wash sites being acquired under the Purchase Agreement.”

Several public REIT have shown excitement around the express car wash sector, but a deal of this size is realistically in play for one of a few scaled players.

Size matters
Essential Properties Realty Trust (NYSE: EPRT) announced pricing of an upsized underwritten public offering of 8.2 million shares of its common stock, all of which are being offered in connection with the forward sale agreements.

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