Most of the U.S. auto industry is on its back, but Carousel Capital may have found a niche that is still surging forward: Companies that repair and spruce up old vehicles, so that folks needn’t buy new ones.
Carousel yesterday announced that it has acquired Driven Brands, parent of economy repair chains like Meineke Car Care Centers and AutoQual. The Charlotte-based firm also figured it had better get Maaco, and has folded the body repair and paintjob company into the Driven Brands platform.
“There are more and more miles driven each year, and the average age of cars is rising as well,” says Bill Hobbs, a partner with Carousel. “Lots of people would like to get a new car, but realize it may make more sense to just have Maaco hammer out the dents and repaint the existing one.”
Carousel is not disclosing the purchase price, so it’s difficult to figure out if it got a good deal or not. What we can say, however, is that the firm has in-depth knowledge of the assets it’s buying.
Carousel actually bought Meineke from Australia’s Brambles back in 2003, before later selling it to company management for a strong return. The company then renamed itself Driven Brands, and acquired a series of smaller players.
One rival out of its reach, however, was Maaco, which was closely-held by company founder Anthony Martino. That changed when Martino died earlier this year, and his family’s estate put the company up for auction. Carousel heard about it, and suggested a buyout of Driven Brands and simultaneous acquisition of Maaco. Driven Brands management agreed, and will remain on board.
Senior debt financing was provided by GE Antares, CapitalSource Finance, Golub Capital and Wachovia, while Gleacher Mezzanine and Allied Capital provided sub debt.
“It’s a very supportive group of lenders, including some who were with us on the original Meineke buyout,” Hobbs says. “I’m not saying it was easy to get it financed, but getting anything closed right now is a success story.”