Blackstone to Acquire Majority Stake in Service King
July 23, 2014—Global investment firm Blackstone Group has agreed to buy a majority stake in Service King Collision Repair Centers from Carlyle Group, according to a July 23 news release from Blackstone.
Financial terms were not disclosed, but the Wall Street Journal reported that the deal values Service King at about $650 million, citing a source close to the matter.
Carlyle, which acquired majority stake in Service King in August 2012, will retain a minority stake in the company, as will the repair chain’s management, according to the release. Under Carlyle, Service King has expanded aggressively, growing from less than 50 shops in Texas to 177 facilities in 20 states. In June, the company acquired 62 Sterling Collision Centers.
“In a fragmented industry, Service King has grown tremendously and Carlyle is proud to have supported their achievements,” said Shary Moalemzadeh, Carlyle managing director and co-head of Carlyle Strategic Partners. “We will continue to support Service King’s business and growth strategy and we are pleased with the successes we have achieved together thus far during Carlyle’s investment period.”
David Stonehill, Carlyle managing director and member of the Carlyle U.S. Equity Opportunity investment team, said Service King’s customer commitment and focus on high quality is what initially attracted them to the investment. Those same qualities make the repair chain attractive to Blackstone, according to the firm’s senior managing director, Peter Wallace.
“We look forward to partnering with management, the Company’s employee-owners, and Carlyle to support Service King’s continued growth and expansion,” he said.
Service King got its start in 1977 when founder Eddie Lennox took out a $10,000 loan to start the business out of his two-car garage. Today it is one of the largest collision repair operations in the U.S.