Car washes are one of the most attractive retail businesses for investors. Experienced investors are regularly buying and selling car washes at an increased rate in the 2020s. But how exactly does the car wash market look in 2022? Insiders expect mergers and acquisitions in the car wash space to continue to grow, but are there other challenges car wash operators can expect in 2022 and beyond?
Since 2015, there has been an increase of at least 6.8% in the number of paid car wash employees in the United States. This is an indication of how fast the industry is growing, but those living in busier areas of the country are likely seeing it for themselves with nearly constant car wash developments popping up seemingly out of nowhere. Even during the COVID-19 pandemic and increasingly concerning economic conditions, mergers and acquisitions in the car wash space continue to move forward.
Market predictions from Car Wash Advisory’s very own Colin May were featured in Carwash.com’s 2022 M&A Predictions post. Colin explained that while Car Wash Advisory predicts M&A transactions to run flat or even lower in 2022 than in 2021, the average size per transaction will increase for several reasons.
One of these major reasons is that the typical car wash business investor has changed from opening a site or two to opening 10 or more sites within a short period of time. Additionally, most of the “low hanging fruit” real estate for car wash development has been acquired, leaving those businesses that are still small or just starting to scale as a clear choice for car wash business investors. Finally, May believes that mid-sized consolidators with a portfolio of 20 or 30 car wash sites will start to be purchased by bigger buyers, using the acquisition of Clean Streak Ventures by Mister Car Wash in late 2021 as an example.
Learn more about the state of car wash M&A activity in 2022 in the Carwash.com 2022 M&A predictions blog post here.
Interested to learn more about which car wash companies have been bought and sold recently? Check out our Who Bought A Car Wash page to explore the latest M&A activity in the car wash industry from around the country.