New ownership means faster growth for Leawood-based Carstar Auto Body Repair Experts, CEO David Byers said Thursday.
Carstar, with about 230 independently owned franchises in the U.S. and Canada, was purchased by the North Carolina-based owner of Maaco, Meineke and other auto service brands.
Driven Brands said it will combine the newly acquired Carstar network with its other auto body businesses as a new division. The Carstar, Maaco and Drive N Style brands will continue to operate separately.
For Carstar, the deal provides the means to accelerate growth of an already expanding business.
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“We have a host of growth initiatives that are on the table,” Byers said. “This partnership gives us the financial resources to determine which of those initiatives we can pursue and accelerate the current growth trajectory that we’re on.”
Sales at Carstar shops reached $712 million last year and totaled $386 million in the first half of this year. The shops employ about 5,000 people.
Adding new Carstar shops typically involves conversion of an existing auto body shop into a Carstar franchise. Byers said he also sees higher sales from existing stores as part of the company’s growth.
Byers said the auto body industry is consolidating the same way the hardware store industry has become dominated by Home Depot, Lowe’s, Ace and True Value.
“You’re going to be left with a small handful of national brands in the collision repair space across the U.S., and Carstar, based right here in Leawood, is the largest of those brands,” he said.
Byers will remain chief executive of Carstar, which has become a subsidiary of Driven Brands. He will report to Jose R. Costa, who has been Maaco’s president and is now group president for the new division.
Costa said the brands will continue to target their distinct markets. Maaco mostly does work directly for consumers and for fleets. Carstar mostly does work for insurance companies’ customers. Drive N Style mostly serves dealerships and other businesses.
Terms of the sale of Carstar were not disclosed. Carstar had been owned by Champlain Capital, based in San Francisco.
Maaco has about 470 shops, and like Carstar shops, they’re independently owned franchises. These franchise owners pay royalties to Maaco or Carstar, which in turn provide materials and other support to the shops.
Costa said the combination of repair networks would give Driven Brands greater negotiating power with its suppliers. It would mean, in turn, better prices and cost savings for the shops.
Driven Brands is owned by Roark Capital Group in Atlanta.
“They bought Driven Brands in April, and we’ve grown the business dramatically because they’re committed to putting more resources, both human capital and financial, into the business,” Costa said.