CARSTAR Acquired by Driven Brands
EDITOR'S NOTE: This story will be updated.
Oct. 22, 2015—Driven Brands Inc. announced Thursday that it has acquired CARSTAR Auto Body Repair Experts.
CARSTAR is one of the largest multi-shop networks of independently owned collision repair facilities in the U.S., operating in over 240 locations in 30 states, and adds to Driven Brands' already diverse automotive offerings with Maaco, Meineke, Drive N Style and others already under the Driven Brands umbrella.
“At Driven Brands, we are committed to expanding our footprint through the acquisitions of complementary brands that can help elevate our presence in the communities we serve,” said Jonathan Fitzpatrick, president and chief executive officer of Driven Brands. “CARSTAR—an iconic brand that is well-recognized and respected by leading insurance companies — brings us additional expertise in the collision repair business. We are excited about the strength this addition brings to the Driven Brands family creating an unrivaled North American powerhouse in automotive franchising.”
The acquisition of CARSTAR gives Driven Brands the opportunity to create a new division called Paint & Collision, which will be led by Jose R. Costa, current president of Maaco Franchising Inc. The new division will be comprised of Maaco, CARSTAR, and Drive N Style.
Costa has served as president of Maaco for the last three years and will apply his experience to lead the Paint & Collision business segment.
“We are energized by the addition of CARSTAR to the Driven Brands portfolio, and know it will play an important part in the newly created Paint & Collision business segment,” said Costa. “I look forward to working with the new members of our franchisee family and to bringing technological developments and competitive pricing to all of our customers.”
The division’s new structure, while operating as separate brands, will allow the business to streamline services and share expertise to improve the customer experience and profitability for franchisees. CARSTAR will retain its current management team, led by CEO David Byers.
“We will benefit from Driven Brands and the Roark Capital team’s extensive franchising knowledge across a number of retail categories including automotive, retail services and restaurants,” said Byers. “And, there are many opportunities for improving operational efficiencies, customer engagement and national branding as part of their portfolio. This move also will bring new capital resources to CARSTAR to continue to drive our growth.”
CARSTAR franchisees were notified via email Wednesday evening about the acquisition. Kerry Woodson, a FenderBender advisory board member and owner of one of CARSTAR's premier franchises, said the news came as a surprise, but he doesn't expect much to change in the near future.
"It should be exciting," Woodson said. "Over the years, we've had a few different financial owners and backers of CARSTAR, and each time it's been positive and it's allowed us to be the MSO partner that we are becoming today."
Woodson said CARSTAR has scheduled an online "town hall meeting" for franchisees on Nov. 10 in which Byers will provide additional information.
Brian Greenley, owner of Maaco Littleton in Littleton, Colo., the chain’s top performing shop, said on a phone call from a Maaco conference in Mexico that franchisees just learned of the acquisition. But the early consensus was that it would provide new opportunity for operators—improving the often-maligned Maaco brand as well as relationships with vendors, insurers and other industry stakeholders.
“Everybody is on board, looking forward to how this is going to move us into the future, bottom line,” Greenley said. “There’s no association of franchise owners that are in a position that they think they have to do anything different or want to slow this down. We really are giving our management team the opportunity to show us what this is going to do for us. We’re excited.”
Greenley, who has a CARSTAR shop as a neighbor, said he’s not aware of any discussion about consolidating brands. He said he’s looking forward to seeing what the networks are able to do together.
“If we leverage our footprint, our buying capabilities that we have, it’s got to drive costs down for our vendors and they’ve got to use us,” he said.