$DRVN Cruising through the Driven Brands thesis | Kyle Mowery GrizzlyRock Capital
About this episode
Kyle Mowery discusses the investment thesis behind Driven Brands and the implications of recent accounting issues.
Driven Brands ($DRVN) puked on a February accounting restatement. Kyle Mowery (GrizzlyRock Capital) walks through why Take 5 remains a crown jewel and could be worth the entire EV of the company (making the franchise and autoglass businesses a free option). We also dig into how the April and May 8-Ks took the scary left-tail risks off the table, why Roark Capital (65% owner) might run a sale process later this year, and the bear case (corporate cost bloat, weakness in the non-Take-5 brands). disclaimer: Andrew is long DRVN Kyle's late 2024 DRVN podcast: https://www.yetanothervalueblog.com/p/grizzlyrock-capitals-kyle-mowery?utm_source=publication-search [00:00:00] Intro and disclosures [00:03:23] What is Driven Brands today [00:05:14] Why the car wash divestiture sold so cheap [00:09:19] Why Take 5 is the crown jewel [00:11:15] EV risk and the US ICE car park [00:13:21] Franchisee demand and unit growth [00:15:31] Take 5 vs. Valvoline[00:18:13] The addbacks problem [00:20:57] Inside the accounting restatement [00:23:22] The cash adjustment [00:28:50] The ATI revenue recognition issue [00:30:12] Reading the April and May 8-Ks [00:32:40] Debating adjusted EBITDA [00:34:55] Corporate…
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