Express Oil's Second Time Around with Carousel

Carousel Capital likes Express Oil so much it did a double take

Carousel Capital likes Express Oil so much it did a double take.

The Charlotte, N.C.-based private equity firm has purchased Express Oil Change & Service Center from Thompson Street Capital Partners.

Birmingham, Ala.-based Express owns, operates and franchises about 200 car-care facilities that provide oil changes, maintenance and repair services in 13 states.

This isn't the first time Carousel has owned Express - it sold off the company to Thompson in July 2010. The firm had originally acquired a majority stake in the company in 2005.

Carousel approached Thompson to buy the company back, according to Carousel managing partner William Hobbs.

Thompson hadn't yet actively sought to sell Express Oil when they were approached, according to Jack Senneff, Thompson's director of deal origination.

Hobbs tells Mergers & Acquisitions that Carousel wanted to buy the company back because it sees a lot of consolidation opportunity in the auto aftermarket space.

Indeed, strategic buyers and private equity firms alike have been looking to the automotive aftermarket for quick returns ever since the economy tanked in 2008. Since then, car owners have opted to keep their vehicles longer rather than buy new cars, thus increasing the market for parts made by third parties.

Recent deals in the space include O'Reilly Automotive Inc.'s (Nasdaq: ORLY) acquiring the retail auto parts segment of VIP, New England's largest privately held automotive parts and accessories chain with 56 stores. Then there's AutoZone Inc. (NYSE: AZO), aggreeing to acquire AutoAnything, an online retailer of auto parts and accessories with approximately $112 million of sales in 2011. Both deals were announced in December and, as of Feb. 1, have yet to close.

Aside from dealmaking, Express Oil is also poised to experience organic growth, Hobbs adds. The company will serve as the firm's new auto parts platform.

Carousel had already made other deals in the space. It acquired auto parts distributor Nestor Sales in 2005, and Simpson Performance Products, a company that makes products for the motor sports industry, in 1998.

Other companies in Carousel's portfolio include dental instrument maker Brasseler USA, packaging company Copac Inc. and financial data provider Mergent Inc.

Thompson is a St. Louis, Mo.-based private equity firm that invests in service, distribution and manufacturing businesses. The firm manages more than $800 million in capital and is raising its third fund.

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