Question about valuing express car wash..............

[Sydmax]

I apologize if this is the wrong forum. I work for a financial institution. We had a long time real estate customer come to us about financing an express car wash purchase he will be making. Normally we would probably stay away from this type of financing because we don't have the expertise however, he's a long time customer.

It's a small express wash that is currently grossing about $300M a year and likely has a max of $400M given the market, etc. The previous owner's financials are just not very clean and he was pulling cash out to finance other businesses, etc. So the financials don't give us a great picture. I spoke with a car wash broker who said that typically, you should see an EBITDA ratio of 55% or so with a decent operator for an express wash, but frankly, I am not tuned into the industry to know if that's an accurate statement.

In terms of valuations, I have read various multiple methods, either gross revenue, gross margin, etc. Then you have to factor in what is the real value of the property (this purchase would involve both the business and the land).

I am not looking for any hard and fast rules here, just kind of a guidance to ball park some numbers, etc.

 

[soonermajic]

Im wondering wth $300M means?!!

Cause i know it doesn't mean 300 MILLION

 

[Rfreeman]

I'm guessing he hit the "M" instead of the "K" right above the M on the keyboard bc if its 300 Million my goodness share the secret sauce please

 

[Kramerwv]

M is just banker speak for thousands. We want to see MM which is millions

 

[OurTown]

It appears that the old school financial people use Roman numeral M for 1,000. They use MM for 1,000 thousands (1 million) but I thought it meant 2,000 in Roman numerals.