Driven Brands Holdings on Sept. 15 announced updated capital allocation priorities. This includes a board of directors authorization allowing the company to repurchase as much as $100 million of its outstanding common stock. The amount represents roughly 5% of the company’s market capitalization.
Purchases are to be funded from available cash balances and ongoing cash flow. The authorization has no stated expiration date.
Mike Diamond, executive vice president and CFO, expressed that Driven’s free cash flow profile and balance sheet create a strong foundation for the company to execute its capital allocation priorities. “This initial authorization demonstrates our commitment to returning capital to shareholders while continuing to invest in Take 5,” Diamond said.
Additionally, Driven stated on Sept. 15 that it plans to continue investing in Take 5 growth — both through shops in new and existing markets as well as acquisitions.
The company also has established a long-term net leverage target of 2x to 3x net debt to adjusted EBITDA. “This range balances financial flexibility, investment capacity and efficient use of capital while maintaining a strong balance sheet,” Driven stated in its Sept. 15 announcement.
President and CEO Danny Rivera remarked: “The strength of Driven Brand’s growth and cash framework has been on full display over the last several years, as Driven reduced its net leverage from 5x at the end of 2023 to an expected 3x at the end of Q3 2026, reaching our 3x target a full quarter ahead of plan. We are entering a new phase focused on deploying capital to support growth, maintaining financial flexibility and enhancing shareholder value. Today’s announcement provides investors with greater clarity regarding the framework that will guide our capital allocation decisions going forward.”