Mister Car Wash

Private equity is interesting in that a new previously unnoticed industry can quickly become wildly attractive for investment.

Take PE firm Leonard Green and Partners (LGP), which bought Mister Car Wash for $500 million in 2014. As the Wall Street Journal article linked below reports, at the time of acquisition the company had 134 locations, or about 2% of the market.

But LGP saw the potential for tremendous growth, and they had a plan. When this article was published, Mister Car Wash had over 400 locations, and LGP’s initial $250 million stake was worth over $2.5 billion.

Three big reasons this roll-up worked so well:

  1. Private equity had never shown much interest in car washes, so competition was light.
  2. The space was quite fragmented, which gave LGP plenty of room to consolidate.
  3. LGP instituted operational changes such as a subscription-based service that made revenue more consistent.

Since that time, the space has become crowded, but I’m always curious to see which industry private equity will pursue next.

private equity roll up
Source: Miriam Gottfried | "Private Equity Wants to Wash Your Car" | The Wall Street Journal | 08/20/2022 | Visit