Really interesting article in this weekend’s Wall St. Journal on how private equity firms are buying up car washes and turning them into regional chains. There is a trend in private equity to buy up small businesses is to bundle the businesses in order to “roll-up” those businesses and find new ways for them to make money. The goal is to create more valuable companies that can be sold for multiples of what the private equity investors paid.
This is happening in all kinds of businesses such as dentist offices, auto-repair shops and dry cleaners. It is happening in the franchise industry as well. It is a trend that seems to have some legs and something to keep watching.