FullSpeed in talks with more prospective targets, managing director says

16 June 2021

FullSpeed Automotive, a MidOcean Partners-backed provider of auto aftermarket services and owner of the Grease Monkey and SpeeDee brands, is in active conversations with potential targets, said Daniel Penn, managing director at MidOcean.
The Greenwood Village, Colorado-based company, which offers oil changes, tire rotations, car washes, brake services and other functions, was sold to MidOcean by CenterOak Partners in November 2020, for an undisclosed price. A month later, FullSpeed acquired Connecticut-based Economy Oil Change, and two months ago, it bought 10 new maintenance and repair centers in South Dakota, Wisconsin, Utah, Georgia and Texas, from five separate owners.
Penn said the latter deal cost less than USD 50m and that an acquisition worth that amount or higher would be considered larger-end. Future targets could range from single-shop owners with USD 1m in revenue to multi-shop outfits with USD 150m in sales, he said, when asked about size parameters.
FullSpeed, which does not disclose its revenue, has a strong platform in Texas, California, the Southeast, the Upper Midwest and the Rockies regions, and it plans to grow there as well as continue to expand its Northeast presence, said Penn. It also wants to bulk up in the mid-Atlantic, he added.
The lube service market is quite fragmented, with the five largest operators taking up only around 13% of the market share, Penn said. Therefore, there are many mom and pop brands that could be potential targets, he added. FullSpeed will also grow organically, through refurbishing existing units and opening new franchise units. Its other brands include American Lubefast and Uncle Eds’s Oil Shoppe.
FullSpeed has maintained a “robust” acquisition pipeline, he said, declining to speculate on how many transactions the company could complete by year’s end. He added that, if significant corporate tax changes are implemented in Washington, D.C., this year, many mom and pop owners could be spurred to sell.
While the auto aftermarket services space was hit hard by COVID-19, with a major decline not only in miles driven but in customer repair needs, the sector has rebounded and demand for FullSpeed’s services has been at normal levels since the beginning of the year, said Penn.
Asked if North Carolina-based aftermarket auto services group Driven Brands [NASDAQ:DRVN], which went public in January, is a competitor of FullSpeed, Penn replied that Driven has a strong quick lube business but noted that it also operates in fields not relevant to FullSpeed, such as collision repair and transmission concerns.
FullSpeed, founded in 1978, has 600 franchise and company-owned locations.
Honigman was legal counsel to MidOcean on the FullSpeed acquisition, while Harris Williams and Gibson, Dunn & Crutcher were financial and legal advisors respectively to FullSpeed.