DRVN - Balance Sheet

Driven brands (DRVN) was last written up on VIC in September of 2023 just after its investor day and has been a vibrant thread since thanks to Nola18 and team. That write up does a phenomenal job walking through the various segments and their economics so we won’t rehash that here in full. We plan to focus on the catalyst path and thesis drivers over the next 18-36 months. DRVN is now at an inflection point over the next 18-36 months where the US car wash business has stabilized, management investment priorities have refocused on organic growth/integration, debt paydown and the crown jewel Take 5 segment is set to become 70%+ of total company EBITDA YE 2026. Trading at 8x NTM EBITDA, DRVN has the potential in a bull case to be assigned the compounder label and subsequent multiple (see YAVB interesting blog on this topic) over the next 18-36 months through steady organic growth and a simplification of its financial statements opening the Street’s eyes to Take 5’s underlying quality. DRVN is a $2.3B revenue, $550M EBITDA/$230M UFCF automotive services platform with a $2.6B market cap. Roark-backed, DRVN went public in January 2021 and treaded water, burning off its multiple until May 2023 when they announced the abrupt and unforeseen exit of then-CFO Tiffany Mason. Three months later they cut the EBITDA guide by 9% due to increasing competition in the car wash space causing the stock to fall 40% and de-rated to 12.5x EBITDA. One year later, shares fell another 20% after the 2nd CFO resignation in 12 months and the car wash and glass businesses continued to struggle. We believe this opportunity exists due to 1) poor historic capital allocation, 2) PE-spaghetti rapid roll-up (and overhang – Roark still owns 60%+ of the company) with poor integration and 3) poor segment reporting creating a complex narrative and making tracking the crown jewel (Take 5 Oil Change) difficult. As a result, the Street has chosen to focus on the business they know best, car wash (15% of EBITDA and shrinking), largely thrown their hands up at the complex modeling, and deemed this management team as untrustworthy/bad. Our bet hinges on management refocusing on internal integration spurring organic growth and margin inflection after years of rapid acquisitions and potentially selling some or all of the struggling car wash business — in our view DRVN is a classic Good Co/Bad Co setup with abating complexity. Maintenance (62% of adj. EBITDA) is made up of two businesses Meineke and Take 5 Oil Change. Meineke performs total aftermarket car care through its network of 775+ stores, is 100% franchised and did ~$40m in 2023 EBITDA with 0-3% SSS growth. Take 5 Oil Change is the hidden gem of the DRVN platform and made up almost 90% of maintenance segment EBITDA (~$285m) in 2023. Take 5 performs DIFM quick oil change & related maintenance services through its network of 1,007 stores. Take 5 is 66% franchised and grew LTM SSS ~6% (17% 2 year stack).Driven Brands（DRVN）上一次在VIC平台被撰文分析是在2023年9月，也就是其投资者日之后不久，此后在Nola18及其团队的推动下，该标的始终是论坛上的活跃讨论主线。此前的撰文已详尽梳理了公司各业务板块及其盈利模式，因此本文不再就此展开完整复述。我们计划聚焦于该标的未来18至36个月的催化路径与投资逻辑支撑。 DRVN目前正处于未来18至36个月的拐点阶段：美国洗车业务已趋于稳定，管理层的投资优先级已重新聚焦于内生增长/业务整合与债务清偿，其皇冠明珠级业务（crown jewel）Take 5 Oil Change板块预计到2026年末将贡献公司总税息折旧及摊销前利润（EBITDA）的70%以上。 DRVN当前的交易估值为未来12个月（NTM）税息折旧及摊销前利润的8倍。在乐观场景下，通过稳定的内生增长与财报结构简化，让市场看清Take 5业务的真实质量，DRVN有望在未来18至36个月内被归类为复利增长型标的，并获得与之匹配的估值溢价（相关话题可参考YAVB的相关博客文章）。DRVN是一家营收规模达23亿美元、税息折旧及摊销前利润5.5亿美元、无杠杆自由现金流（UFCF）2.3亿美元的汽车服务平台，当前市值为26亿美元。 由Roark支持的DRVN于2021年1月上市后股价长期原地踏步，估值持续被压缩，直至2023年5月，公司宣布时任首席财务官（CFO）蒂芙尼·梅森（Tiffany Mason）突然且意外离职。三个月后，受洗车业务领域竞争加剧影响，公司将EBITDA业绩指引下调9%，导致股价下跌40%，估值被下调至12.5倍EBITDA。一年后，由于12个月内第二位首席财务官辞职，且洗车与玻璃业务持续陷入困境，公司股价再度下跌20%。 我们认为此次投资机会的存在源于三点：1）过往糟糕的资本配置决策；2）私募背景下的繁杂快速打包收购扩张（PE-spaghetti），整合效果不佳且存在股权抛售压力——Roark目前仍持有公司60%以上的股份；3）业务板块披露不清晰，导致投资逻辑复杂，难以追踪核心资产Take 5 Oil Change的真实表现。因此，市场投资者仅关注其最为熟悉的洗车业务（仅占EBITDA的15%且占比持续收缩），大多因复杂的模型测算而放弃跟进，并认为该管理团队不值得信赖、能力不佳。 我们此次投资押注的核心在于：在经历多年快速收购后，管理层重新聚焦于内部整合以推动内生增长与盈利拐点，且公司有可能剥离部分乃至全部陷入困境的洗车业务。在我们看来，DRVN是典型的优质业务/劣质业务二元结构，当前其业务复杂度正逐步降低。 维保业务（占调整后税息折旧及摊销前利润（adj. EBITDA）的62%）由Meineke与Take 5 Oil Change两大业务板块构成。Meineke通过其覆盖775家以上门店的网络提供全品类售后汽车养护服务，采用100%特许经营模式，2023年EBITDA约为4000万美元，同店销售额（SSS）增长率为0至3%。Take 5 Oil Change是DRVN平台的隐藏明珠，2023年其贡献了维保业务板块近90%的EBITDA（约2.85亿美元）。Take 5通过其1007家门店网络提供代客服务（DIFM）快速换油及相关维保服务。Take 5采用66%的特许经营模式，过去12个月（LTM）同店销售额增长率约为6%，两年累计增长率达17%。