Circle K parent company to acquire True Blue Car Wash
Alimentation Couche-Tard Inc. is growing its car wash business.
The parent company of convenience store chains Circle K and Couche-Tard has entered into an agreement to acquire all of the membership interests of True Blue Car Wash LLC ("True Blue"), which 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.
Arizona-based True Blue currently has 65 car washes located in high-traffic areas in Arizona, Texas, Illinois and Indiana, along with with a strong pipeline of future new-to-industry sites planned and under development, according to a statement by Couche-Tard.
With approximately 170,000 fast-pass subscription members, representing more than half of total revenue, True Blue has experienced strong growth in recent years and is well-positioned to continue to grow in a highly fragmented and growing industry, the company added. More than 60% of the industry is comprised of standalone operators owning one to two car wash locations.
Couche-Tard said it believes True Blue’s sites are a natural extension of its current car wash network of more than 2,500 locations and will further enhance the customer experience. 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, said the convenience retailer.
“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."
The transaction is expected to close in the first half of 2023, subject to standard regulatory approvals and closing conditions. It will be financed using Couche-Tard's available cash and/or existing credit facilities.
"We are impressed by the strong growth achieved by True Blue in recent years, as evidenced by an approximate 45 percent 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," said Claude Tessier, CFO, Couche-Tard.
Upon the closing of the acquisition, True Blue's management, office and operations teams are expected to join Couche-Tard. Current CEO Stuart Crum will lead its operations.
"I am both delighted and excited to be joining the Couche-Tard/Circle K team,” Crum stated. “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."
Circle K is the global convenience store brand of Laval-based Alimentation Couche-Tard Inc., which operates in 24 countries and territories, with close to 14,300 stores. With its Couche-Tard and Circle K banners, Couche-Tard is one of the largest independent c-store operators in the United States.