Driven Brands Holdings Inc. (DRVN) is getting out of the international car wash business. The company announced Tuesday that it's reached a definitive agreement to sell IMO, its overseas car wash operation, to Franchise Equity Partners for 406 million euros—that's roughly $471 million in U.S. dollars.

The deal is structured based on IMO's balance sheet as of June 30, 2025, and includes the usual locked-box protections you'd expect in a transaction like this, plus a daily price adjustment running from July 1, 2025, until the deal actually closes. Speaking of which, that's expected to happen sometime in the first quarter of 2026, assuming regulators give it the green light.

So what's Driven Brands planning to do with all that cash? Most of it will go toward paying down debt, with the rest earmarked for general corporate purposes—which is corporate-speak for "we'll use it where we need it."

The Accounting Shuffle

Starting in the fourth quarter of 2025, the Car Wash business will show up as discontinued operations on the books. Meanwhile, Auto Glass Now is getting promoted to its own separate reporting segment. It's all part of the company's strategy to streamline operations and make its financial picture clearer for investors.

The transaction should knock about 0.3x off Driven Brands' pro forma leverage ratio, which helps the company march toward its target of hitting 3x net leverage by the end of 2026. That's the kind of balance sheet improvement Wall Street likes to see.

What Management Is Saying

"This transaction sharpens our focus on what we do best — scaling Take 5 and driving consistent cash generation through our Franchise Brands," said Danny Rivera, president and Chief Executive Officer.

"IMO is a good business, but it is not core to our long-term strategy. By exiting it, we simplify our portfolio, strengthen our balance sheet, and position Driven Brands to create greater value for shareholders."

Translation: IMO might be decent, but it's not where the company wants to concentrate its energy. Better to sell it, clean up the balance sheet, and double down on what's actually moving the needle.

Revised 2025 Guidance

With the international car wash business now classified as discontinued operations, Driven Brands updated its full-year outlook. The company now expects continuing operations revenue between $1.85 billion and $1.87 billion—down from the previous range of $2.10 billion to $2.12 billion. Adjusted earnings per share are now projected at $1.18 to $1.23, compared to the earlier guidance of $1.23 to $1.28.

Same-store sales are now tracking slightly below the low end of the company's 1% to 3% guidance range. But the company still anticipates opening 175 to 200 net new stores during 2025, so the expansion story remains intact.

Stock Movement: Driven Brands shares climbed 1.70% to $14.37 in premarket trading on Tuesday.