Target Information

Splash Car Wash, founded in 1981, is a leading car wash operator in the Northeast United States, boasting over 65 locations in Connecticut, Massachusetts, New York, and Vermont. The company has established a reputation for excellence, offering a diverse range of services, including full-service, hand-wash, express options, detailing, and other automotive care. Recognized as one of the top 20 largest car wash operators in the U.S., Splash has received numerous accolades, including the title of "Best Car Wash" from various organizations.

As the company evolves, it has announced a significant leadership change, with Dan Petrelle, who has served as COO for the past 22 years, succeeding co-founder Mark Curtis as CEO. Curtis will transition to the role of Chairman of the Board, overseeing the company's continued commitment to exceptional customer service.

Industry Overview

The car wash industry in the Northeast United States is characterized by robust growth potential, driven by increasing consumer demand for automotive maintenance and convenience. As vehicle ownership rates rise and consumers prioritize vehicle appearance and upkeep, car wash operators are positioned to benefit from this trend. The Northeast market, in particular, presents unique opportunities for expansion due to its densely populated urban areas and a growing emphasis on environmental sustainability.

In recent years, the industry has seen a shift towards automated and eco-friendly car wash solutions, as operators adopt technology to enhance efficiency and customer experience. Companies that embrace innovative approaches and environmentally friendly practices are increasingly favored by consumers, providing a competitive edge. Furthermore, the economic recovery post-pandemic has boosted consumer spending in discretionary areas, including car wash services.

The fragmentation of the car wash market also presents opportunities for strategic acquisitions, enabling larger operators like Splash to expand their footprints and enhance service offerings. With a commitment to quality and customer satisfaction, industry leaders are well-positioned to capitalize on these growth opportunities and set new standards in the market.

Rationale Behind the Deal

The strategic partnership between AEA Investors and Splash Car Wash is expected to facilitate the company's growth trajectory by leveraging AEA’s extensive experience in scaling businesses. With a focus on both organic growth and strategic acquisitions, the partnership aims to enhance Splash’s operational capabilities and market presence. The transition of leadership to Dan Petrelle also signals a commitment to continuing the legacy of excellence while adapting to changing market dynamics.

This investment comes at a crucial time for Splash, as it seeks to broaden its service offerings and expand into new geographic areas. AEA's backing will provide the necessary resources and industry expertise to accelerate Splash's initiatives, maintaining its competitive edge in a fragmented market.

Investor Information

AEA Investors, established in 1968, is a private investment firm with a focus on the middle market. With approximately $18 billion of invested and committed capital, AEA has a notable history of partnering with strong companies to drive growth and operational excellence. The firm's global presence is reinforced by an extensive network of industrial families and business leaders who contribute to its strategic vision.

The AEA Small Business Private Equity strategy is particularly focused on identifying promising investment opportunities in fragmented markets, making Splash an attractive addition to its portfolio. AEA’s commitment to collaboration and support aligns with Splash's ambitions for growth and service enhancement.

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This partnership between AEA Investors and Splash Car Wash is promising and could yield significant returns given the current trends in the car wash industry. Splash stands out as a premier operator within a fragmented market, and AEA's expertise in scaling businesses is likely to amplify the company’s growth potential. The emphasis on maintaining high-quality service while pursuing strategic acquisitions presents a balanced growth strategy that aligns well with market demands.

Moreover, the leadership transition to Dan Petrelle is a pivotal move that could ensure continuity while injecting fresh perspectives into the company's strategy. With AEA's support, the company is poised to enhance its market position and explore new opportunities, fostering innovation across its service offerings.

Overall, the partnership appears to be a timely and strategic investment in the car wash sector, which is experiencing robust growth driven by consumer preferences and changing industry dynamics. This could mark the beginning of an exciting new chapter for Splash, setting the stage for both short-term gains and long-term success.

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