Alimentation Couche-Tard is acquiring U.S.-based True Blue Car Wash LLC.
True Blue operates express tunnel car wash sites under the Clean Freak brand in the American Southwest, as well as the Rainstorm brand in the American Midwest.
Founded in 2016, the company has 65 car washes located in high-traffic areas in Arizona, Texas, Illinois and Indiana, plus a strong pipeline of future new to industry sites planned and under development.
According to a release, True Blue has about 170,000 fast-pass subscription members, which account for more than half of total revenue, and the company has experienced strong growth in recent years: "[It] is well positioned to continue to grow in a highly fragmented and growing industry, more than 60% of which is comprised of stand-alone operators owning one to two car wash locations."
Couche-Tard says these sites are a "natural extension" of its current car wash network of more than 2,500 locations" "With more than 85% of True Blue's locations within three miles of a Circle K location, the transaction provides a strong geographic overlap to support traffic-driving offers between True Blue sites and Circle K convenience stores."
"We are committed to leading and innovating in fast-growing segments that meet our customers' needs. With True Blue, we have a great opportunity to extend our brands into a very attractive industry subcategory in a way that complements our convenience and mobility offerings and enhances value for our customers," said Brian Hannasch, president and CEO of Alimentation Couche-Tard. "Adding True Blue's high-quality car wash sites to our family presents compelling opportunities to cross-promote and build loyalty and engagement for both customers and our team members. We are looking forward to having its talented team join us in our efforts to shape the future of convenience."
CFO Claude Tessier added: "We are impressed by the strong growth achieved by True Blue in recent years, as evidenced by an approximate 45% growth in total cars washed between fiscal 2018 and fiscal 2021, and believe this acquisition will enable future growth for Couche-Tard in this segment as well as contribute to create value for our shareholders".
The transaction is expected to close in the first half of 2023. At that time, True Blue's management, office and operations teams are expected to join Couche-Tard, with current CEO Stuart Crum to lead its operations.
"I am both delighted and excited to be joining the Couche-Tard/Circle K team," said Crum. "I am confident that together we will build a world class Express car wash business just as Couche-Tard has done over the last 40 years in the convenience store business. We will take our industry leading playbook with Couche-Tard's operating and growth model to become the leading operator in the car wash industry."