Diversifying Owners’ Holdings
Sonny’s is the leading manufacturer and marketer of conveyorized car wash systems and related products. Founded in 1978, Sonny’s provides equipment, parts, control systems, and chemicals to customers ranging from single-location car wash owners to large multi-site operators. Sonny’s complements its product offering with a market-leading suite of services that includes site selection and design, marketing support, education, and software.
Background
Sentinel was introduced to Sonny’s by a boutique advisory firm tasked with finding a financial partner who would assist the owner and CEO in achieving his estate-planning objectives, would be a responsible steward of the business and good partner to management, and could help accelerate Sonny’s growth through add-on acquisitions. Sentinel was chosen because of our strong cultural fit with the management team, experience investing in branded manufacturing businesses, proven record of closing transactions, and capital committed to support an aggressive growth vision.
Opportunity
- To acquire a majority interest in the leading player in conveyorized car wash systems and related products
- To partner with a world-class management team who continued to own a significant stake in the business
- To participate in expected industry growth driven by the technology-driven shift to highly automated and more convenient express wash formats
- To capitalize on Sonny’s leadership position to make strategic bolt-on acquisitions to grow its suite of services and expand its geographic presence
Accomplishments
Smooth Transition to Sentinel Ownership: Sentinel and management worked closely together to ensure a smooth transition for this 40-year-old, family-owned and -operated business.
Accelerated Growth Through Acquisitions: During Sentinel’s ownership, Sonny’s completed six acquisitions that:
- Added carwash chemicals, a highly attractive consumable product, to its product offering
- Extended Sonny’s offering in foaming equipment, signage, and marketing
- Added local distribution, construction, and service in the Southeast and Southwest, two key growth geographies for the car wash market
Exceptional Financial Performance: Sonny’s sales and profitability more than doubled, fueled by strong performance in its equipment business and successful cross-selling from add-ons.
Outcome
Having accomplished our investment objectives in under four years, Sentinel and management sold Sonny’s to another financial buyer in a highly successful transaction. Sonny’s CEO continued to run the business under new ownership.
Case studies have been selected for illustrative purposes for management teams of midmarket companies considering a partnership with Sentinel and should not be considered an offer or solicitation of services or an actual or implied endorsement of Sentinel or any security, investment, or portfolio company. The portfolio companies highlighted are not representative of all current and prior investments of Sentinel. A list and description of investments since Sentinel’s inception is available on this website.