LAVAL, QUEBEC, CANADA—Alimentation Couche-Tard Inc. announced it will acquire True Blue Car Wash. True Blue operates express tunnel car wash sites under the Clean Freak brand in the U.S. Southwest as well as the Rainstorm brand in the U.S. Midwest.
Founded in 2016, True Blue currently has 65 car washes located in high-traffic areas in Arizona, Illinois, Indiana and Texas and future new-to-industry sites planned and under development. True Blue has 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, more than 60% of which is comprised of stand-alone operators owning one to two car wash locations,” said Couche-Tard in a statement.
Couche-Tard believes these sites are also 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, according to the company.
"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."
Claude Tessier, chief financial officer, 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 calendar year 2023. Upon the closing of the transaction, True Blue's management, office and operations teams are expected to join Couche-Tard, and current CEO Stuart Crum will lead its operations.
"I am both delighted and excited to be joining the Couche-Tard/Circle K team. 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," said Crum.
The car wash industry is steadily expanding, with further industry growth expected across the next decade. While some convenience retailers have leveraged car washes to drive traffic and deliver growth, potential remains for additional convenience retailers to incorporate a car wash as part of their offering. NACS offers a free report, “Leveraging Car Wash Potential in Convenience Retail,” to help retailers understand the landscape of car washes at convenience retailers.