Driven Brands Holdings Inc. has agreed to sell its International Car Wash (IMO) unit to Franchise Equity Partners for €406 million. The valuation is based on the June 30 2025 balance sheet and the transaction includes no post‑closing adjustments for cash, debt or working capital. A locked‑box structure protects the buyer, and a daily “ticker” increases the purchase price by a fixed amount in euros from July 1 2025 until closing, which is expected in the first quarter of 2026 pending regulatory approvals.
The divestiture removes a non‑core, discretionary asset and is intended to accelerate Driven Brands’ deleveraging plan. Management estimates the sale will reduce pro‑forma leverage by roughly 0.3x and will provide cash that will be used primarily to pay down long‑term debt. CEO Danny Rivera said the transaction “sharpens our focus on what we do best—scaling Take 5 and driving consistent cash generation through our Franchise Brands.” CFO Mike Diamond added that the deal “helps accelerate our path toward de‑leveraging our balance sheet while maintaining operational focus on our core North American businesses.”
The sale will lower the company’s 2025 continuing‑operations outlook. Revenue guidance is cut from $2.10‑$2.12 billion to $1.85‑$1.87 billion, and adjusted EBITDA guidance is reduced from $525‑$535 million to $445‑$455 million. Adjusted diluted EPS guidance is also lowered from $1.23‑$1.28 to $1.18‑$1.23. The revisions reflect the removal of IMO’s approximately $200 million in revenue and $70 million in EBITDA, as well as a modest margin compression that the company expects to offset with stronger performance in its Take 5 and Franchise Brands segments.
From the fourth quarter of 2025, the IMO unit will be reported as discontinued operations, and Auto Glass Now will be presented as a separate segment. While the fact‑check report does not provide the exact historical financials for IMO, the unit previously contributed a significant portion of the company’s international revenue and was a key driver of its global footprint. Its removal will therefore sharpen the focus on the North American core businesses.
On the day of the announcement, Driven Brands’ shares traded up 1.70% in pre‑market trading. Analysts highlighted the strategic clarity and deleveraging benefits as the primary drivers of the positive reaction, noting that the sale removes a legacy asset and improves the company’s balance‑sheet profile.
Regulatory approvals required for the transaction include competition reviews in the European Union and the United Kingdom, as well as oversight from the UK Financial Conduct Authority. No major hurdles have been identified, and the parties expect a smooth approval process.
The proceeds from the sale will be used mainly to reduce long‑term debt, targeting a net leverage ratio of less than 3x by the end of 2026. The company plans to apply the cash to senior secured notes and bank loans, thereby strengthening its capital structure and freeing up resources for future growth initiatives.
The transaction positions Driven Brands to concentrate on high‑growth, cash‑generating franchise operations, improve financial flexibility, and set the stage for continued expansion of its core Take 5 and Franchise Brands businesses.
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