PE buying Laundromats?
I read about how PE does acquisitions of dental practices and was hoping i could get some clarity since im not in pe.
My dad owns a laundromat in a large metropolitan area and it’s extremely successful but hes too lazy to expand due to age but theres lots of potential to grow and build more stores. I have seen and worked with him since the beginning and know I have the ability to get capital and execute an expansion. I was hoping if anyones knows if a PE firm would be willing to buyout a group of successful/well run laundromats?
How heavy is capex?
cant tell u exact numbers since it’ll depend on size of laundromat. but heaviest capex is machines and then renovations/plumbing/etc but primarily machines.
iirc my dad paid off everything between 3-5 years.
What about capex as a rough % estimate of revenue? Doesn't really help anyone saying what your heaviest capex is as anyone who thinks about this will arrive at the same insight you provided.
theyre good cashflow but hard to scale due to geographic dependence and servicing. Most laundromats dont clear $1M EBITDA so not for PE, unless I’m missing something
People say the same thing about car wash and lgp made 10x on mr car wash sooo
That's interesting. My dad did something similar with car washes, but he didn't end up making a ton of money. It's just too hard since the cash flows aren't amazing. Everything he made came from exiting, and his IRR wasn't amazing. Everything he ended up "making" was put into paying off debt
Cinven has a related business relevant to this: https://www.cinven.com/where/investments/jla/
Is there a SuperLab below the laundromat? cuz that’s where the real cash flow is
based
Werner Ziiiiiiiiiegler
I’ve looked at this personally. I would considering doing it myself but there isn’t much leverage created through adding more locations so it’s not really for PE in my opinion. Margins for someone owning 50 locations aren’t much better than owning 2.
I feel like the strategy here would be fairly similar to self-storage investors. There are a lot of small things you can do to optimize profitability of acquired locations, even if there aren't as many traditional economies of scale.
Depends on the location, have heard of MM shops doing this in the SE
care to name shop(s)
Really can’t remember, think it was based out of CLT. Was thinking about buying a laundromat for a minute.
https://eqtgroup.com/news/2015/eqt-infrastructure-ii-acquires-wash-mult…
Its a great family office play - throws out great cashflow, GDP grower, counter cyclical if anything, can compound infinitely or be run for cash.
Not a great PE play given 1) usually no good story to tell (and LPs kinda care about that), 2) little benefits to scale, 3) little to no operational improvements - also given the characteristics above (not quite infra but much less risky than normal businesses) people would look at mid teens returns on such assets which therefore would not meet the PE return profile.
A Pe firm I worked at owns a laundromat that owns ones at colleges, successful investment for them but heavy capex
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