Why Quality Car Washes Stand Out in a Selective M&A Market

There’s been a lot of noise in the markets lately. Stocks have been volatile, long-term Treasury yields remain elevated, and oil, geopolitical risk, and inflation concerns continue to create uncertainty. Investors are also grappling with the long-term implications of government debt and the rising cost of capital.

At the same time, gold has been one of the year’s standout asset classes. The interesting part isn’t simply that gold is up. We already know investors tend to move toward perceived safe-haven assets when uncertainty increases.

The more important question is why capital is moving there in the first place. When the environment becomes less predictable, investors place a greater premium on certainty, durability, scarcity, and predictable returns. They become less willing to pay for a story and more willing to pay for something they believe will preserve value and perform through different market environments.

There’s a clear parallel for us in car wash M&A. Buyers aren’t simply underwriting growth. They’re underwriting confidence.

They’re asking: How durable is the cash flow? How defensible is the location? How stable are the margins? What happens in a downturn or if competition increases? How much capital will the business require? And ultimately, how comfortable are we putting our capital behind this opportunity?

That’s why I believe the current environment is creating an opportunity for high-quality car wash businesses. It doesn’t mean M&A stops when uncertainty rises. It means capital becomes more selective and concentrates around the best opportunities. We have been vocal on this point all year. 

Businesses with clean financials, predictable revenue, strong unit economics, quality real estate, proven operations, and a credible growth story still command significant buyer interest. In fact, those characteristics have become even more valuable as buyers scrutinize risk more closely.

This is also why our role with sellers goes well beyond simply bringing a business to market and finding a buyer. We must understand what makes a business financeable, defensible, and compelling before it ever reaches the market.

We’re not selling gold. But the underlying principle is the same. Gold attracts capital because investors believe it can preserve value when the environment becomes uncertain.

In our world, the equivalent is a car wash where a buyer can review the financials, real estate, customer base, operating history, and growth opportunity and conclude: “I believe this cash flow will hold up.”

That belief creates confidence. And confidence creates competition. So when we’re speaking with current and prospective sellers, we should focus on more than revenue growth and headline multiples. We should identify the characteristics that make a business resilient and then present those characteristics in a way that allows buyers to recognize the value immediately.

Because ultimately, we’re not just selling a car wash. We’re selling a buyer’s confidence in the future cash flow of that car wash, and in a more selective capital environment, that confidence has real value.

Quality doesn’t just matter more. Quality is getting priced differently. Let’s keep that perspective in our conversations with sellers and buyers.

Jay De La Riva 

Director – Sales & Acquisitions