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Atlantic Street increases stake in Zips Car Wash

Atlantic Street Capital has agreed to expand its stake in Zips Car Wash, a national car wash operator.

Atlantic Street Capital has agreed to expand its stake in Zips Car Wash, a national car wash operator. No financial terms were disclosed. The deal is expected to close in the second quarter.

PRESS RELEASE

NEW YORK, May 17, 2022 – Atlantic Street Capital (“Atlantic Street” or “ASC”), a private equity firm that invests in lower middle market companies to unlock equity value through an operationally intensive investment approach, today announced an agreement to increase its investment in its portfolio company, Zips Car Wash (“Zips”). The transaction allows ASC to acquire equity from founding shareholders and build upon an operating strategy that has already driven considerable growth. The transaction is expected to be completed in the second quarter.

Zips is a leading national car wash operator with over 200 locations under a single-brand concept. Atlantic Street Capital Fund IV (“ASC IV”) initially invested in Zips in May 2020 and follow-on to this investment, successful organic and inorganic initiatives have increased EBITDA more than six-fold and grown total sites from 185 to 235 locations currently.

During ASC’s initial hold, Zips has developed into a top brand with advanced car wash technology and improved customer service. ASC installed a proven management team with a passion for driving growth, brand development and customer experience. Through development of its subscription-based models, Zips Unlimited Wash Club memberships today represent a majority of revenue and contribute to strong revenue stability. “We approach all of our investments as essential service providers,” said ASC Managing Partner, Andy Wilkins, “helping professionalize companies, driving organic growth, and building them into industry leaders. Zips is a powerful example of how the combined resources of Atlantic Street’s investment team and 30-strong dedicated operating advisor team gives us a sustainable advantage in driving remarkable success – in this case outpacing our underwriting case in just two years.”

ASC rolled and increased its GP commitment to Zips and partnered with lead investor, ICG, along with ASC IV rolling LPs, management, and minority owners for the acquisition. The transaction allows ASC to continue executing the company’s core growth plan, build upon its organic growth initiatives and accelerate its acquisition strategy to be consolidator of choice in a large, highly fragmented market. Whit Williams, ASC Managing Partner, commented, “The increase in Zips’ enterprise value has predominately been a result of operational improvements driving significant organic growth at the company. We still have a long runway for those initiatives to affect even stronger results, and to use our scale and operational capabilities to substantially grow site count in a large, fragmented market. We’re excited to partner with our investors, as well as increase the GP’s investment in Zips to capitalize on this opportunity.”

About Zips Car Wash
Zips, headquartered in Plano, Texas, is the largest privately held car wash operator nationwide. Zips is among the fastest growing express car wash chains in the country, operating 235 locations across 22 states. With over 17 years of car washing experience, Zips has invested in industry leading technology, creative hiring and training methods, local partnerships, and a laser-focus on customer care as driving forces behind Zips growing business model. Zips Car Wash is about much more than getting cars clean. Our #1 purpose is to make people happy, from our community outreach efforts and fundraising programs to our focus on employees. Zips strives for a great, clean, and fun customer experience. To learn more visit: www.zipscarwash.com.