Bruce Milen, Chairman of the Board of Jax Kar Wash, first sold his business back in 1998 during a period of consolidation and roll ups. He had and took the opportunity to buy it back three years later in part because the companies had some operating issues and price was right. After that, he says he really didn't have any plans on selling, but rather was ready to continue operating what they had, which was profitable. Then he started hearing about the multiples that were being paid for car washes.
"We were now heavy into the subscription business, which is our unlimited plan where people pay by the month as you would with a health club," he said at the Detroit Smart Business Dealmakers Conference. "And the private equity started coming after us. We hired an investment banking-type company to be our advisers. And when we started hearing some of the numbers, I said, Well, maybe this is the right time to sell. And then we made our next move."
Milen says the choice to remain a minority partner this time around was important because he and his team were still operating the business; TRP Capital, the buyers, wanted the team to stay; and also he had money in the game and would be watching it the way they want it watched.
"When I had sold the business back in 1998, that company had no interest us staying on or keeping money into it," he says. "They just gave us our check and walked away. This is completely different. We got a check and we were able to stay."
Before taking the company to market, Milen says they hired a CFO, which he says he didn't think they needed but soon found out that a CFO was important part of the team. He says they also made it a point to inform and reassure his management team about the potential sale.
"(The CFO) really got us in the right direction with our numbers and how to present things to any potential buyers," Milen says. "That was an important part of it. We told our management team about this right from the beginning, soon as we had a good, valid offer. We didn't want to hide anything from them. And we told them we were going to be expanding, which we did. We told them that they're not going to make any less money, they'll be making more money, they did. So everything we told them was going to happen, happened. We were able to keep our credibility with our management team. And we still have the same exact management team — although we've expanded that in the last year. But that was important. Your employees are important. You want them to stay with you. You want them to be happy. And with our type of management structure, it's boots on the ground all the time. And that's what makes our company great — it's by our managers that we have."
Milen says he learned from the previous sale about a lot of things that he had to do. That included making sure the properties were in good shape and everything was working well. That the accounting and IT departments were strong, and everything else that had to be done to make the company look good. Presentation, he says, matters.
"You have to be able to tell a good story and back it up with the numbers, and talk about what the expansion can be," he says.
