Zips Car Wash Files for Bankruptcy, Plans Ownership Transfer
Dallas, TX - [Date] - Car wash operator Zips Car Wash has filed for Chapter 11 bankruptcy protection. The company plans to hand over control of its operations to its private credit lenders.
According to court documents, Zips has assets ranging from $500 million to $1 billion and liabilities between $1 billion and $10 billion. The restructuring aims to reduce debt by approximately $279 million and secure $15 million in new capital.
Zips expects to emerge from bankruptcy within two to three months. The company, backed by Atlantic Street Capital, had previously negotiated with lenders such as HPS Investment Partners, PennantPark Investment Corp., and Brightwood Capital Advisors.
Zips joins a growing list of companies that have taken on private credit financing and subsequently faced financial challenges, resulting in the transfer of ownership to creditors. Insurance claims manager Alacrity Solutions and educational software provider Pluralsight Inc. have recently undergone similar restructuring deals.
Zips, which owns brands such as Rocket Express Car Wash and Jet Brite Car Wash, is seeking court approval for $30 million in debtor-in-possession financing to maintain operations during the bankruptcy process and continue paying employees and suppliers.
The company, founded in Arkansas in 2004, has grown into the largest privately held car wash operator in the US with approximately 260 locations in 23 states. Its expansion reflects the recent private equity-fueled boom in the car wash industry nationwide.
Atlantic Street Capital invested an additional $70 million in Zips in June. The private equity firm initially invested in May 2020 and increased its stake through a continuation fund in 2022.
Case Details:
* Zips Car Wash, LLC, Case No. 25-80069
* US Bankruptcy Court for the Northern District of Texas