Law Firm Investigates Mister Car Wash Deal

The proposed all-cash transaction values Mister Car Wash at approximately $3.1 billion. Leonard Green & Partners (LGP) will pay $7.00 per share for all outstanding shares it doesn't currently own, a figure that represents a 29% premium over the 90-day average price leading up to the announcement. LGP has been the majority owner of Mister Car Wash since 2014, long before its 2021 IPO. The current deal would end what has been described as a "thoroughly disappointing spell in the public markets" and return the company to private ownership under its long-term private equity partner. The investigation's core concern is a potential conflict of interest, stemming from LGP's dual role as both the controlling shareholder (owning about 67%) and the buyer. Probes are examining whether the board of directors breached its fiduciary duties to the public minority stockholders by agreeing to the sale. A central issue is the buyout price, which some argue is unfairly low. Other law firms have highlighted that the $7.00 per share offer is nearly 20% below the company's 52-week high. The deal was approved by a special committee of independent directors, and LGP-affiliated board members recused themselves from the vote. However, due to LGP's majority ownership, the acquisition does not require a vote from minority shareholders to proceed and was secured through written consent. Mister Car Wash CEO John Lai has stated that going private will enable the company to "invest more boldly" in its stores and technology. The company's leadership aims to accelerate growth with the ultimate goal of tripling its operational footprint. The transaction follows a period of financial growth for Mister Car Wash, which operates approximately 550 locations. For the full year 2024, the company reported a 7% increase in net revenue to $994.7 million and a 12% rise in adjusted EBITDA to $320.9 million.