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CHARLOTTE, N.C. - Driven Brands Holdings Inc. (NASDAQ: DRVN), a $2.53 billion market cap automotive services provider in North America, has struck a definitive agreement to divest its U.S. car wash operations to Whistle Express Car Wash for $385 million. This strategic move is set to streamline Driven Brands’ focus on its expanding Take 5 Oil Change® brand and its stable of cash-generating franchise brands. According to InvestingPro analysis, the company currently appears overvalued relative to its Fair Value, making this divestment timing particularly strategic.
Jonathan Fitzpatrick, President and CEO of Driven Brands, stated that the sale is the culmination of a strategic review aimed at maximizing value for the company’s U.S. car wash business. Fitzpatrick expressed confidence that this transaction would position the company to better execute its strategic initiatives and enhance shareholder value over the long term.
The agreement stipulates that Whistle will pay Driven Brands $255 million in cash and provide an interest-bearing seller note worth $130 million, subject to standard adjustments. The expected closure of the transaction is in the second quarter of 2025, pending customary closing conditions.
Driven Brands plans to allocate the cash proceeds primarily to debt reduction, with a target of achieving a net leverage ratio of 3x or lower by the end of 2026. This debt reduction initiative is crucial given the company’s current debt-to-equity ratio of 4.23x and total debt of $4.08 billion, as reported by InvestingPro. Subscribers to InvestingPro can access detailed debt analysis and over 30 additional financial metrics for DRVN.
Expressing gratitude, Fitzpatrick thanked the U.S. car wash team for their dedication and service, and anticipated a seamless transition for customers and stakeholders alike.
Further details regarding the transaction and the company’s 2025 guidance will be discussed during Driven Brands’ fourth quarter and full year 2024 earnings call, scheduled for today.
William Blair & Company, L.L.C. is acting as financial advisor, while Latham & Watkins LLP is providing legal counsel to Driven Brands in this transaction.
This sale is part of Driven Brands’ broader portfolio, which includes a variety of automotive service businesses such as Take 5 Oil Change®, Take 5 Car Wash®, Meineke Car Care Centers®, Maaco®, 1-800-Radiator & A/C®, Auto Glass Now®, and CARSTAR®. The company operates approximately 5,200 locations across 13 countries and services nearly 70 million vehicles annually, generating about $2.3 billion in annual revenue from roughly $6.5 billion in system-wide sales.
The information in this article is based on a press release statement from Driven Brands.
In other recent news, Driven Brands Holdings Inc. announced a significant leadership transition with Daniel Rivera set to become the new President and Chief Executive Officer on May 9, 2025. The current CEO, Jonathan Fitzpatrick, will step down and assume the role of Non-Executive Chair, continuing as a senior advisor through the end of the year. Rivera, who has been with the company since 2012, has held various leadership roles, including President of Meineke and Take 5 Oil Change. This change is part of a multi-year succession plan by the Board’s Nominating & Corporate Governance Committee. Additionally, Driven Brands revealed that Michael Beland, the Chief Accounting Officer, will resign effective January 3, 2025, to pursue another opportunity. Michael Diamond, the current Executive Vice President and Chief Financial Officer, will serve as interim principal accounting officer. The company emphasized that Beland’s departure is not due to disagreements on financial reporting or accounting practices. These developments come as Driven Brands continues to generate approximately $2.3 billion in annual revenue from $6.5 billion in system-wide sales.
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