Discretion Key in Engaging Car Wash Signage Specialists

Sensitive diligence for a prominent target in the niche car wash sector.

Challenge

Private equity firm PNC Riverarch Capital (“PNC”) was considering acquiring TSS Inc., a leading manufacturer of car wash signs, in a proprietary deal. The company’s numbers looked good, and TSS held a strong market position in an attractive niche industry. PNC needed to speak to experts in the space to help them better understand the role signage plays in the car wash business, the nature of the competitive space and industry trends.

Discretion was of the utmost importance to PNC, given the nature of the deal: TSS is one of few car wash sign companies in the U.S. Apex Leaders respected the sensitive nature of the outreach and vetting, ensuring that advisors weren’t tipped off on the target company, especially in early stages of the deal.

Key Diligence Angles

PNC was looking for a wide array of experts that could help them evaluate the potential deal, from general industry experts to specialists in the field. They wanted to learn more about the following areas:

• The role signage plays in car washes—is the spend discretionary or critical, and is it considered an investment?
• The competitive space—who are the main players in the car wash signage making space and what differentiates the players?
• Marketplace trends—how have purchasing patterns changed with the economy, are more customers buying from China, and what is the demand for customized or high-end signs?
• Purchasing trends—what is the typical replacement cycle for car wash signs?

The Search

The types of advisors PNC was seeking fed into four main buckets: independent car wash owners, senior executives at car wash chains, car wash equipment installers and car wash OEM’s—employees from companies that produce car wash equipment. The search took a partnership approach, with the Apex team in frequent communication with PNC.