Episode 7: With Investment Banker Bill Koenig

About the Episode:

Ready to grow your car wash chain and wondering about your financing options? There may be more available than you think. In this episode, guest Bill Koenig, a seasoned investment banker, shares with host Lanese Barnett various financing options to facilitate meaningful growth or fund capital improvements on existing sites, many without going to the local bank and signing another personal guarantee.

Bill and Lanese also talk about how firms like Amplify Car Wash Advisors support and advocate on behalf of car wash owners going through a capital advisory process helping ensure the best terms for the owner to maximize their value. Having professional investment banking representation coupled with running a competitive bid process to create healthy tension among potential financiers and lenders can make a major difference in how favorable the financing terms are for the car wash owner. Listen to this episode to learn more about your options to fund growth, and how to get started.

More about Bill Koenig:

Bill Koenig has more than 25 years of financial services experience in the areas of investment banking, corporate finance, leverage finance, subordinated debt financing, equipment leasing, commercial real estate investing, and both primary and secondary loan syndications and trading. He has completed more than $3 billion in M&A and capital markets transactions encompassing management led buyouts, sell side engagements, international financings, complex commercial real estate, and various structured debt transactions.

Previously, Bill was a managing director with CREO Capital Advisors, a FINRA-registered investment bank based in Los Angeles, where he led multiple sell side mandates and was head of Capital Markets. Prior to CREO, Bill served as executive vice president for Western Alliance Bank (NYSE: WAL) in Phoenix, Arizona where he managed various specialty banking groups including corporate finance, leverage finance, equipment leasing, municipal finance, resort finance, and the bank’s equity investments in several SBIC funds.

Bill holds a Master in Business Administration (MBA) degree in corporate finance from the University of Southern California where he graduated with Beta Gamma Sigma honors, and a Bachelor of Science in economics from San Diego State University. He serves on the board of the Alliance of M&A Professionals, Phoenix Chapter, and was a previous trustee with the Phoenix Art Museum and Phoenix Symphony. Bill is registered with FINRA and holds the Series 63 and 79 licenses.

Check out the full transcript below:

Lanese

Welcome to episode seven of Car Wash M&A, The Podcast. Today I have Bill Koenig, who is managing director of mergers and acquisitions at Amplify Car Wash Advisors, on as our guest. And Bill has more than 25 years of experience in investment banking, and brings such depth of knowledge to our team on the financial side. And so today we’re going to talk about some of the insights and tips that Bill can share on how to fund growth that is separate from selling part of your business and just looking at other ways to fuel that growth. So Bill, I’d love for you to share with our listeners a little bit about your background. And then also what got you interested in the carwash space particularly.

Bill

Sure, I’d be happy to. Well, you know, I’m a California native by origination. I’ve been in the capital market pretty much my entire life. I started off on the private equity side working for a business in San Diego called Home Capital Development Group. And then I ended up going to work for Warehouse Venture Company, which was 100% focused on joint ventures in the commercial real estate space. But then ultimately, I ended up coming over to the banking side and was a corporate banker for a number of years, both real estate industries and then non-real estate industries. And then I ended up getting my MBA from USC, gosh, 20 years ago now… seems like forever ago! And then I ended up going more on the investment banking capital market side. So I worked for a boutique middle market investment bank out in Los Angeles for a number of years and really kind of met Jeff Pavone when I was in that prior role. We were working on a similar client, a shared client, and got to know each other through that process, and eventually decided to work together. So now I’ve been here about 18 months. I was originally an independent contractor and am now full time. And 80% of what I do is really sell side engagements, like you mentioned. That’s really… you know, Amplify talks a lot about that, sell side mandates. But then there’s also this 20% that’s capital raising or debt placements. And so I focus on that as well.

Lanese

We’re happy that you made the transition over to a full time car washer and on the team here. We came on board around the same time. And it’s been fun to watch how the team has grown with Amplify Car Wash Advisors, and seeing again, the depth that our resources we have through the experiences of each of our team members. So one quick thing, too, just about your transition into specifically working more in the car wash space. What has surprised you most about the car wash industry as you’ve become more familiar with it as a specific area of business?

Bill

You know, to be honest, it’s the margins! You know, I’ve worked in a lot of different industries, many of which I thought had very attractive EBITDA margins, EBIT margins, you name it. And when I got exposed to the car wash business, it was really remarkable how thick the margins are, but also how stable they are. You know, with this growing subscriber base, this recurring revenue base, it’s made the industry incredibly attractive, not only from a risk perspective, because the cash flow is so stable, but also from a valuation perspective. And the people. I would say that’s the third thing. There’s a lot of really great people in this industry. Very smart, very hard working, salt of the earth types. And it’s a pleasure to work with people like that.

Lanese

I totally, totally agree. That is one of my favorite things about the car wash industry and the community itself is that you have this broad spectrum of people that all have this shared niche interest (and I think niche to kind of the broader world) that car washing always kind of gets a side eye — “Oh, you’re working in a car wash?” — but it’s a very, very dynamic industry that I think that once people get exposed internally to it that they really get drawn because of that communal sense amongst the people. And then it is an attractive business model in and of itself because the money is good. So… Okay, so you also mentioned earlier that we do a lot of sell side representation. And a lot of our business is kind of focused on… We have these three areas in our tagline: sell, partner and grow. And so we we do talk a lot about the sell side of it. And we talk a lot about the partnering side with private equity groups. But what about this third part with grow? What are some of the methods and ways that car wash chain owners can fuel that growth? Especially if they’re a smaller chain, let’s say five to seven locations. What can they do?

Bill

Yeah, that’s a great question. So, you’re right. You know, a lot of the activity is around these majority buyouts. But there’s also this smaller recapitalization play on the balance sheet. Maybe it’s a minority equity raise. Maybe it’s a non-dilutive debt placement. Maybe it’s even a sale leaseback.

Lanese

Bill, can you talk to me a little bit about the non-dilutive debt placement just for our listeners. Can you unpack that for us, please?

Bill

Yeah, so essentially, it involves going out to a traditional financing source like a bank or maybe a finance company, or maybe institutional REIT that will do a sale leaseback. Where there isn’t an exchange of equity interest in the business, it’s really a debt facility that’s put on the balance sheet, right? So no change in control. It’s very cost effective, especially on an after tax basis, versus equity, which can be much more expensive. And it can be used for a variety of things: it can be used to do a technology refresh at the business, it can be used to go out and buy new equipment, or it can be used to do acquisitions, tuck in acquisitions under the existing business. And a lot of times, you know, we’ll find, you know, smaller car wash operators, like you mentioned, five to seven units that don’t want to sell their business, aren’t looking for a transformation, and all the cultural issues that come with that. All they really need to do is find some, you know, attractive capital to go out and do some acquisitions and grow their business. And we get calls like that quite frequently. We’ve done quite a few debt placements in that space both with banks and with non banks. And like I mentioned earlier, it can be very attractive in terms of the cost. It’s non-dilutive in terms of the equity, there’s no change in control of ownership, the due diligence is often significantly less than it is with an equity buyout. And there’s an abundance of capital in that world that’s looking for a home. So I get emails and calls every day, from banks, finance companies, looking for opportunities, both in the car wash space and the non-car wash space. I mean, it’s clear that, you know, good times and bad, banks, lenders, whatnot, are constantly looking to deploy capital with attractive opportunities. And there’s no shortage of that in the car wash industry.

Lanese

For sure. They’ve figured out what you have, that once you scratch the surface on the car wash industry, that there’s more to be found there than maybe meets the eye on first blush. And really, you’re right, the revenue stabilizing monthly plans have been such a game changer for our industry, because this is a business that historically lives and dies by the weather. And to my knowledge, so far, you can’t control it. So that has been such a change in how the value of and the stability of a car wash is really seen. And then also, of course, we’ve seen explosive growth in the industry over the last several years. So with that growth, and with increased competition coming in, these alternative means of funding and fueling growth are more important than ever, because if you have a regional chain that’s coming to your market, and you have a couple of locations that have been really rock solid in that market in that community, but as somebody that’s maybe going to open five stores, or six stores in your area, it might be time to be thinking about ramping up as well to defend your turf.

Bill

Yeah, that’s right. And not only just in terms of maybe new builds, or new site acquisitions, but also in terms of tech refresh. You know, leveraging capital to deploy back into the business, you know, to enhance the operation, enhance the equipment, enhance the technology that’s in use to drive efficiencies… all those things that will help make the business more competitive, and ultimately more attractive to customers.

Lanese

Oh, absolutely. And you mentioned the investment in technology. And that’s another thing that we are seeing currently is this technological boom, where there are a lot of new and emerging innovations that are addressing operational issues that car wash owners face that are helping streamline what they can do in the technology front. It has been interesting to watch that. I feel like this has kind of lagged a little bit behind some other industries that have adopted some of these technological advancements sooner, but we’re seeing it on the digital side and with automation in how the payments are processed or how… We’ve had pay gates for a long time, but taking things a step further with app-based platforms, and so on and so forth. All of those things cost money, and so, in order to keep up, you have to be able to invest into that to do it.

Bill

Right. I couldn’t agree more!

Lanese

Let’s talk a little bit about what options car wash owners have. So we talked about these alternative lendings and non banks. So who might be a non-bank lender that you would suggest for an option for car wash owners that they may not be aware of, or may not have the same access to? What are some of those?

Bill

Yeah, so the two most common ones that come to mind are REITs or finance companies that are doing either sale lease backs, you know, where the car wash owner will sell the underlying real estate and improvements to a third party and then lease it back over some duration of time — 20 years, 25 years, whatever. Or there’s the avenue where a car wash owner can approach one of these finance companies, lever up their existing balance sheet, you know, get an enterprise value loan, which is a loan that’s basically lent against the enterprise value of the business. It is typically expressed as a formula: funded debt to EBITDA. And those are typically, you know, 3, 4, 5 times or less. But you can take that capital from that source, that REIT financier or that finance company, and then go use it like I mentioned — to do other things, to grow the business enhance the business, or whatnot. The issue comes with, you know, kind of… There is somewhat of a cost to debt. You know, I mentioned it was cheaper than equity, which is true. But as you look at smaller businesses, you know, under $25 million of EBITDA, as you kind of go down, you generally don’t tend to see debt facilities that aren’t personally guaranteed, right? And that can get can be a little concerning to some owners. As you get above $25 million of EBITDA, we start to see those personal guarantees go away. And the reason for that is, is because the corporate governance in the business typically becomes more robust. They often have audited financial statements, they often have advisory boards advising them on the business, they often have more defined management teams, and they have bigger market share. So all that kind of comes together to reduce risk and negate the need for those personal repayment guarantees.

Lanese

Right. And that’s huge, because signing on that dotted line for the personal guarantees… I mean, that’s a really big way for a car wash owner to de-risk personally by using an alternative source of funding that doesn’t require another personal guarantee that maybe they’ve already been using to get to where they are.

Bill

Right.

Lanese

And the ability to grow faster, because I would imagine that there’s only so much capital that they could raise going to their local banks, within a certain period of time… that there’s a limit to that or a ceiling.

Bill

Yeah, you know, there’s over 7,000 banks in this country. Everything from small community banks, $100 million of assets, to Bank of America, and Wells Fargo and everything in between. So there’s no shortage of traditional bank financing, and it’s cheap. But the problem with banks is that they’re slow. They tend to be focused on, you know, three sources of repayment: the asset liquidation value of the business, the enterprise value of the business, and then a personal repayment guarantees. And if they can’t get all three of those, it becomes more tenuous for them to get to the finish line. You know, finance companies, refinanciers, tend to be much more creative, a little bit more nimble. They can be more expensive. So there is a trade off, you know, in terms of price, cost benefit analysis, but they all pretty much require, like I said, personal repayment guarantees under $25 million. So that’s been a pretty fairly constant element.

Lanese

And you mentioned the sale leaseback option. So let’s talk a little bit about that. Is there a threshold if you have a portfolio of sites that you want to be mindful of how many of those sites that you’ve already sold the real estate as pertains to a future sale of a full exit? Is there anything that car wash owners need to be kind of mindful of when it comes to how they’re choosing to fund their growth… like if they did all sale leaseback on all their properties, does that affect the future value of their business when they’re looking to exit?

Bill

Yeah, it does. It does affect the future value of the business. You’re taking an asset on your balance sheet, and you’re moving it off your balance sheet; you’re agreeing to make a lease payment over time to service that facility. And so you’re reducing those assets on that business and the enterprise value goes down accordingly. The EBITDA is also impacted, right, because you’re now paying rent on an asset that before you own yourself and may or may not have been paying rent on, or it could have been pocket to pocket rent. That will typically get added back in terms of coming up with an adjusted EBITDA for evaluation exercise. But the flip side of that is is that when you do a sale leaseback you’re reducing the invested capital in the business. And all things being equal, if the marginal benefit of that EBITDA exceeds the cost of that lease, the invested capital goes down, the return on invested capital goes up, and so, cost of capital being the same, that’s how you create shareholder value. So it can be a very attractive way for any owner of any business to create long term shareholder value. But you’re right. I mean, there is a bit of a cost there in terms of when you do exit, the business. Evaluation can come down a little bit. Just using simple math, it could be without sale leasebacks your 15 times, your trailing 12 month adjusted EBITDA in terms of evaluation metric, after you might be 12 or 13 times. Still a great number; still a great outcome. But there’s always give and take. Same thing with debt. You know, if you lever up your balance sheet and you go sell your business, you know, most sales are structured on a cash-free debt-free basis, which means the seller gets to sweep the cash, but they have to pay off the debt. So if you lever up your balance sheet, when you sell your business, it’s less money in your pocket at the end of the day.

Lanese

So it’s like everything; there is a cost. Nothing’s free.

Bill

Nothing’s free. No free lunches.

Lanese

But that’s where having somebody help you walk through these different options and guide you through this process, like yourself, can really make a difference. Because if you are a typical car wash owner that you’re laser focused on your operations, and that’s what you’re really good at, and maybe sourcing these different financing options is not your area of expertise… So what are some of the reasons that someone might benefit or the advantages of having a professional advisor in this area to walk an owner through what their options are and walk them through the process?

Bill

Yeah, so that’s where we can really add a lot of value. You know, you think of the large fortune 500 company that has a dedicated internal Treasury team and a CFO, it’s easy for them to go out and raise capital, either debt or equity, because they know who the key sources are. They know who to call. A small business owner may not know who to call. I mean, I mentioned earlier, there’s 7,000 banks. You know, there’s literally 1000s of finance companies. And I don’t know how many RIETs, but there are a lot of them, you know, and who do you call, right? And if you do know, somebody at Bank of America or your local community bank, you know, are you calling the right person? If you call somebody in the real estate industries group, they may know nothing about car wash and they may just decline the credit, and it dies on the vine. That’s where we come into play.

Lanese

And it wastes time.

Bill

Yeah, it wastes time. So it’s not just understanding what banks look at, right? I mean, they’re looking at liquidity, they’re looking at solvency, they’re looking at how to mitigate risk. We can help with that. I was a creditor; I know how to mitigate risk, I know how to structure credit facilities, so we can help with that. But then we also know who to call internally. We know who the lenders are within these banks that actually will do car wash lending, that have an appetite to do it. So you get a response that’s favorable, not just a no return phone call. And there’s a lot of work that goes into this, too. I mean, banks don’t just want to see financials; they want to see projections, they want to see management team bios, they want to see subscription trends, they want to see churn trends. You know, it’s not the same level of due diligence that a private equity buyer or a strategic buyer would look at in a full blown sale. But there’s still a fair degree of due diligence that they dive into. And, you know, we can help pull all that together, put it in a nice clean package that we can then share with 20 or 30 lenders and create that competitive tension, that dynamic, that’s going to get our clients the best price in terms.

Lanese

And that’s really the key here is that competitive component of it to secure the best price and the best terms. So let’s talk about some of the terms that can be more favorable to a car wash owner that we would advocate for that maybe wouldn’t be on the table unrepresented.

Bill

Well, first of all, it’s the interest rate. Without a competitive process, you know, who knows what you’re going to pay? And it’s not just the rate; it’s the fees as well. There’s usually an upfront commitment fee. Sometimes there’s unused line fees, and so you take all that in connection with interest rates, and it can push the yield up considerably for the borrower. So that’s the obvious one. But the other one is terms, advance rates; how much will the lender lend? Typically on a… if you’re looking to borrow funds to go do acquisitions, it will be more of a leverage type loan structure that will be governed by funded debt to EBITDA covenants, fixed charge coverage covenants. You know, as a borrower, you want the most liberal covenants you can get. And again, you’re not going to find that the top, the limit, unless you test that with the broader capital market and create that competitive tension. And again, you know, I mentioned personnel repayment guarantees. We try ad nauseam to try to get those off the table as best we can. You know, it’s very difficult to do that. But sometimes you can get there with alternative structures. Carry agreement structure is one that’s not widely used anymore, but I still use occasionally. And sometimes I’ll get resonance from that. And they basically that instead of a personal repayment guarantee, the obligor agrees to carry the property while the bank goes through a mitigation exercise if there’s a default. Right. So that was used in California, you know, many years ago, and still used some extent, but a lot of people don’t know about that. So there’s some creative things we can throw on the table. There’s burn offs on the guarantee. You know, you may start with high leverage, but then as the business burns the leverage down, you know, say from maybe four times funded debt to EBITDA down to two times funded debt to EBITDA or even less… We’ll advocate for those guarantees to go away. And sometimes we’re successful. Sometimes we’re not. But you know, if you don’t have those dialogues… If you don’t ask for that stuff, and you don’t offer up some creative alternatives, you’re never going to get it, right?

Lanese

Right.

Bill

But all these are ways we can add value to the process. And then, I think the third thing is time. It’s very time consuming to talk to 15 to 20 lenders. I mean, we’ll take those phone calls, we’ll respond to those emails. We’ll negotiate on your behalf. We’ll be the bad cop if we have to be to get you the best outcome. So when a relationship is actually solidified, the loan is closed, the financing is in place, you know, everybody feels good about it, right?

Lanese

Exactly. And that’s something that we talk about on the M&A side as well. While we’re representing the car wash owner, we’re also having these relationships with the other side. So in this case, the lenders or whoever the capital providers are… They’re looking to put their money somewhere. So they want a place to put their money. And we want to just make sure, if it is with our client, that we’re maximizing the terms and everything for them. But it can be a win win situation for both parties involved, that everybody walks away happy from it.

Bill

Absolutely.

Lanese

And that’s definitely our goal.

Bill

Definitely.

Lanese

With this topic, we spoke a little bit about the rising competition in the car wash space, what do you see coming through for the end of the year, and then into 2023 as far as any trends, or just your predictions of what we might see on a growth level, or how car wash chains continue to scale up…

Bill

A lot of people were concerned about an economic slowdown and how that may affect the M&A activity in the car wash space. And frankly, I haven’t seen that yet, there still seems to be a tremendous amount of interest to consolidate in the industry, you know, from financial buyers and strategic buyers. That doesn’t appear to be slowing down at all. So I expect that to continue, the consolidation trend. The technology overlay is going to be tremendous. Virtually every financial buyer, we talked to talks about the lack of technological innovation, artificial intelligence, other electronic digitization methods that have not been overlaid over the industry or used to leverage efficiencies in the industry. That’s definitely going to continue through the end of the year and into 2023. And I think you know, the availability of financing, the appetite from creditors to continue to lend into the industry, it continues to evolve. Car wash is a lot like the fast food franchise industry was 20 years ago, same exact concept. You’ve got a commercial pad; you’ve got to building on it. You got people going to a fast food lane buying food… Lenders struggled with that years ago as well, right? Is it a business loan? Is it a real estate loan?

Lanese

Will people want to pick up their food and take it with them? Won’t they want to sit down at a table and have someone serve them? That’s what we heard with the Express exterior model; no one’s going to want to vacuum their own car. This is ludicrous. Right?

Bill

Right. And so all those fears have now gone away, right? People see it as a legitimate business. The capital market has become very sophisticated. Everybody knows now what good margins are versus bad margins, what a good operator looks like in terms of churn statistics and membership profile versus what a poor operator doesn’t. You know, six years ago, that wasn’t the case. Nobody had a clue. And so now it’s become very sophisticated, which is good because more people, more lenders, have entered that fray, that capital provider segment of it. The ability of funds has gone up precipitously because of that.

Lanese

And it’s beneficial for the consumer as well. Because as this iteration or this genesis of the car wash industry keeps going, we’re providing a better product, too. We as the car wash industry, we are providing new services in ways that are appealing to customers, because we keep seeing the demand and the appetite for professional car washing rise. So we haven’t even peaked on where saturation may be because people still want it, and even through COVID, there was a huge concern about people aren’t driving, they’re not going to work. But the car wash industry was very resilient. And so that is something that leaves some optimism with the current economic climate that’s a little bit changing, or there’s some fears with things going on and interest rates and global issues that affect all businesses. But so far we’ve seen that continued resiliency with the car wash industry.

Bill

Yep. The “Do It For Me” trend is going to continue right and car wash plays right into that. It takes a lot less water to go through a commercial car wash than it does to do it yourself. And with the water issues, especially in the west, where I live, that’s a real concern. And so, I think that all benefits the industry long term.

Lanese

Gosh, you know, you talk about water issues. So, I’m in Texas; you’re in Arizona. Big drought situations right now, but this is something that happens a lot. But even globally, in Europe, they’re having crazy wildfires and their main river sources are low, and so it is a little bit of a… It’s something to be mindful of that water is going to remain a very hot button topic that… Again in Texas and Arizona particularly, it’s always something that’s kind of (and California), it’s always something you’re kind of thinking about. But it seems globally that water continues to be a big issue. Bill, we talked a little bit in the beginning about those three things: Sell, Partner, Grow. And I just wanted to circle back with that and talk about some of the benefits specifically, of using capital advisory and using these alternative means of funding to grow your business as opposed to funding through equity.

Bill

Yeah, so there’s a number of benefits in using debt versus going to a sale and raising equity. I mean, the most obvious one is that the business owner retains control, 100% control, and also is not diluted in terms of their equity ownership. That’s a big one, right? Debt is non dilutive. The second one is that debt is cheap, both on a pre tax basis, and even more so on a post tax basis. You know, equity can cost now more than 25 to 30%. Debt is typically in that kind of 5 to 10% range pre tax, which is significantly less than equity. A lot of people don’t realize that equity has a cost, even though it doesn’t have a mandated fixed payment every month or every quarter, there’s an opportunity cost, there’s a public capital market, and everything’s benchmarked according to that, in terms of equity return requirements.

Lanese

And the control side of it.

Bill

Yeah, and the control is huge. You go out and sell 51% of your business, your partner, obviously, is going to be very smart, hopefully, there’s going to be a great cultural fit, and they’re going to help you scale the business. But they’re going to demand a lot. I mean, the reporting is going to be monthly; there’s going to be quarterly board meetings, if not more. You don’t have any of that with debt. I mean, you have some reporting requirements that are typically quarterly, and then there’s annual, as well. But there’s no typically monthly reporting; there’s no mandatory sit down meetings with your lender.

Lanese

And that’s something that we find a lot with car wash owners that they are used to being their own boss. And so they have started their business, grown their business. And when you change the structure of that, that now they’re not their own boss, it can be really beneficial. But it can also be a very tough transition. So this is a way for, especially people who are looking to continue their career and growing and scaling and are not ready to take that avenue, this is a great option for them.

Bill

That’s exactly right. I completely agree. The other thing is, there’s a couple of more things here. The level of due diligence is nowhere near as exhaustive with debt raise as it is with an equity raise. And that’s another thing to keep in mind, in that for businesses that have a modest amount of leverage on their balance sheet right now. You know, leveraging up that balance sheet to go do acquisitions or maybe even do a dividend recap. And it was a very viable alternative to an equity raise. So those are all things that business owners ought to consider when they think about you know, a full sale, a partial sale, or a debt placement.

Lanese

And talk to me about the dividend recap.

Bill

Yeah, so a dividend recap essentially, is a company borrowing money, leveraging up their balance sheet, and then distributing out those debt proceeds to the equity owners as a dividend distribution, a special one time dividend distribution. It’s common place in the corporate world to see leverage recaps; not so much in the car wash space yet, but I think there’s an opportunity for that. A good example of that would be someone who had, you know, seven to 10 or more stabilized car wash assets, they’ve been in the family or they’ve been in the under the common ownership for many years. Very minimal debt, maybe there’s some equipment debt, but that’s it. So there’s an opportunity there potentially to go from kind of zero debt up to maybe three, three and a half times funded debt to EBITDA and use those debt proceeds either as a full dividend distribution or as a partial dividend distribution, or an equipment refinish or a technology refresh. So lots of different flexible avenues that one can take with that.

Lanese

Right. And what would you suggest to car wash owners that are looking to begin this process? Are there any tips or suggestions that you have on what they can do internally to prepare either their books and records or prepare their materials as they start navigating potential capital raises through these alternative means?

Bill

Yeah, my advice to them is exactly what we would do if they were to hire us right to go out and seek capital for them. You know, I would start thinking about getting the financial house in order; make sure your books and records are clean. If you haven’t had a CPA do your accounting, your bookkeeping, it might be a good idea to start thinking about that. If you don’t have a CPA, then definitely pull all your tax returns together, because that will be something that lenders will want to vet. Make sure you pull together your ownership schematic so someone can easily see how the business is structured. Pull together your functional org chart of your people; pull together bios on your key people. Look at key statistics on your customer base, you know, customer churn, growth trends, how you’re taking… any new marketing initiatives you’re pursuing to drive revenue in the business, any technology initiatives you’ve taken in the past or are planning on taking in the future… Clearly identify what the sources and uses of the loan proceeds are going to be for, and clearly think about what the repayment sources are going to be. Your cash flow, the value of your assets, the value of your business, all that stuff goes into kind of a lender’s mindset of how they wrap their brain around whether this is a good opportunity for debt or not a good opportunity for debt.

Lanese

Well, and that stuff takes a lot of work. So that is where it’s nice to have an outsourced option that’s a professional that knows exactly what those lenders are looking for to help compile all the information that owners may not just have laying on their desk in a nice folder that has everything prepared ready to go to show someone else, so that is a really attractive part of it, of not getting bogged down with pulling together all that information that we can help with that.

Lanese

Right.

Lanese

Well Bill thank you so much for being on with us today. Again this was episode seven of Car Wash M&A, The Podcast. It’s hard to believe that we’ve crossed over the you know the halfway mark of the year and the seven months have gone by so fast. Where can people reach you if they have any questions or want to reach out to you directly?

Bill

Oh, my cell phone is always the best place to reach me that’s 602-769-4501. Text or call anytime.

Lanese

I’ll take you up on it, Bill. I’ve got some questions. But thank you again, and thank you to all of our listeners. You can find new episodes the last Thursday of every month. Please feel free to review our show if you are so inclined, and we will see you next month.

Jet Brite Car Wash

With decades of hands-on experience as operators, when it came time to sell our car wash business who we sold to was important to Sam and me. Chris [Jenks] and the team at Amplify listened to us throughout the entire process. They found the right buyer in ZIPS who would be a good steward of the brand and helped find the best path forward for us where we can continue pursuing our passion for manufacturing high-quality car wash equipment.  

Jet Brite Car Wash  
Dave Delesandro  | Founder

Quick N’ Clean

My relationship with Commercial Plus over the past 20 years has been a very professional and trustworthy relationship. The feel of trust is very important in this business, and Jeff Pavone and his staff have exhibited a level of trust that makes me continue to feel that they have my best interest front of mind. I deal with many brokers across the nation, and my best experiences and results have been achieved with Commercial Plus representation.

Quick N’ Clean
Richard Karle | Owner

Zips

It’s been a great experience working with Amplify Car Wash Advisors to bring these sites into the ZIPS portfolio. We look forward to serving Dallas area customers with an enhanced car wash experience unique to ZIPS, with the added benefit of our extensive network of stores. This year we have continued our aggressive growth track with the goal to truly shine in our efforts to be the best express car wash provider in the industry and it’s acquisitions like this that help us reach our goals.

Zips
Gene Dinkens | CEO

ModWash

It was truly a pleasure to work with the Amplify team on our most recent acquisition of three additional operating locations in our home state of Tennessee. Their team provided great support and ensured a timely and seamless closing process, and we are excited for the additional growth opportunities this relationship will produce in our near future. We know this is the first of many transactions we will successfully complete with the Amplify team as we grow from our current operating store count of 23 to well over 200 locations across 14 states in the next two years.

ModWash
Brian Thornton | COO

Busy Bee Car Wash

For years I’ve talked to a lot of brokers with the same goal; sell your car wash chain as quickly as possible. But I chose to work with Amplify because they were interested and invested in the emotional side of selling my business and truly value long-term relationships. They weren’t forcing me to take a deal just to take a deal. They listened to my concerns and goals then educated me on all my options. And that’s how I decided on the right partner for my chain specifically. I went to bed at night after I signed the papers knowing I got the best deal possible versus just having any deal put in front of me that is only about money.

Busy Bee Car Wash
Jim Mulholland | Owner

Q Car Wash

We really appreciate Jeff and his entire team at Amplify. Their expertise and deep industry knowledge helped us navigate our options and best showcase our strengths to maximize our value. Caliber is a good fit for Q Car Wash as they look to expand in North Texas.

Q Car Wash
Viran Nana | COO

Cobblestone Auto Spa

I have known both Jeff and Bill for over thirty years combined, and respect them both as experts in our professional car washing industry. Their unique and individual strengths bring very strong talent and advice to operators, sellers, and buyers with sharp knowledge, client’s best interest in mind, and an actual personal touch. They hold the expertise and performance track record to hold a very high level of respect within this rapidly-changing car wash industry.

Cobblestone Auto Spa
Tuck Bettin | CEO

Oasis Car Wash

Turning over a business you started from one shovel of dirt 25 years ago and grew to several locations is a difficult and even uncomfortable process. So, when it came time for Larry and me to sell, we chose Amplify Car Wash Advisors to guide us through the process because of their strong reputation and thought leadership in the industry. Their team was professional and did a great job walking us through each step.

Oasis Car Wash
Dallas Hawkins | Partner

Busy Bee Car Wash

Selling our business after 52 years is big deal and certainly not a decision I took lightly, turning over our family legacy was an emotional process and I appreciated that the team at Amplify respected that. They helped me understand my options and found the best deal for me.

Busy Bee Car Wash
Jim Mulholland | Owner

Ducky’s Express

I have been a multi-site developer and operator in the car wash industry for over 30 years. Four years ago, a partner’s health concern forced me to sell a portion of my portfolio, and during that process, I was introduced to Jeff Pavone of Commercial Plus. I was immediately impressed with Jeff’s knowledge of my industry and his volume of successful deal closings. In a very short period of time, Jeff found the right buyer at a very fair price, and the transaction closed shortly thereafter. I was looking for a team with honesty, integrity, and a proven track record of success, and I found all of that in Jeff.

Ducky’s Express
Richard Miller

Trademark Car Wash

These are some of the most exciting times for car wash owners. As we grew 350% in revenue in just one year, we recognized the time to partner up with a top-tier team that has mastered growth in retail and specifically the automotive industry. Amplify Car Wash Advisors had helped us acquire, raise capital, and was the perfect partner to help us reach this next chapter of the Trademark story.

Trademark Car Wash
Andrew Goldberger