Activist ADW Capital has called on Driven Brands to launch an immediate strategic review, urging the automotive services group to consider a sale or break-up, according to a report by the Wall Street Journal.
The hedge fund, led by Adam Wyden, holds a roughly 2.5% stake in the company and has written to both Driven and its majority owner, Roark Capital, criticising the firm’s strategy and oversight.
Driven, which owns Meineke and Auto Glass Now, has a market value of around $2bn. Roark acquired the business in 2015 and floated it in 2021, and still controls about 60% of the shares. The stock has fallen more than 60% from its post-IPO peak.
Shares dropped around 30% in a single session last month after the company revealed “material errors” in prior financial statements alongside “material weaknesses” in financial controls.
In its letter, ADW says Driven should either be sold in full or broken up, suggesting such a move could unlock a valuation of more than $30 per share, compared with a closing price of $12.38 on Tuesday.
Wyden argues that Roark’s increasing focus on its restaurant portfolio has distracted from Driven’s performance. He also criticises the company’s expansion beyond its core vehicle maintenance and repair operations, pointing to a move into car washes as damaging to investor confidence and shareholder returns.
ADW, founded in 2011, manages several hundred million dollars. The firm recently called on Compass Diversified to pursue a strategic review and liquidation.
