Kelso rescues Red Driving School

The embattled Red Driving School group has been rescued out of administration in a move that safeguards around 400 jobs, it has been confirmed.

LVG, which owns Red Driving School and Red Instructor Training, has been bought by the London based private equity firm Kelso Place Asset Management.

The deal secures the future of the Red brand and Kelso said it had no plans for redundancies.

The business will continue to trade as RED under the brands RED Driving School, RED Instructor Training and RED Fleet Training.

Red Driving School is the third largest in the UK, while the group’s instructor training division is the biggest in Europe, with a network of 22 colleges.

Brighton-based LVG also owns Red Fleet Training, as well as driving instructor accountancy service FBTC, a trade magazine for the driving instructor training industry called ABI News, and Practical Driver Instructor Aids.

The driving school group collapsed last week due to funding woes, although administrator MCR stressed at the time that accounts suggested the business was “quite a healthy and profitable operation”.

Philip Weston, Partner at Kelso Place said:
“RED is a very strong, stable and profitable business, which experienced a short term funding difficulty when its financing facilities were changed suddenly. We have made a significant cash investment in RED in order to solve its funding problem and to ensure that it is able to continue operating successfully for the long term.”

David Downing, Chief Executive Officer of the RED business, said:
“Throughout this short period of administration, the company has continued to trade as normal. As a result of Kelso Place’s investment, RED is now in a very strong financial position, which will enable us to maintain our high levels of customer service and cement our market leading position.”

LVG was launched in 1992 and its workforce is spread across three sites – its head office in Brighton, as well as offices in Liverpool and in Billingham, near Middlesbrough.

It has annual revenues of around £40 million and has helped pass more than 10,000 trainee instructors in the last five years alone.

About RED

The RED business consists of six trading divisions which represent a portfolio of services and products operating across the driving instruction industry. These include RED Instructor Training (the UK’s largest driving instructor training organisation), RED Driving School (the UK’s fastest growing, national driving school), FBTC (provision of accountancy services), adiNEWS (subscription based trade magazine), PDIA (sale of practical driving instructor aids) and RED Fleet Training (management of Occupational Road Risk).

About Kelso Place Asset Management

Kelso Place Asset Management was founded in 2000. The firm has raised four funds to date and has made a total of twelve investments. Current Kelso Place investments include M86 Security, a global provider of E-mail and Internet security products; Solution1, a communication service provider; and Anya Hindmarch, a luxury designer brand.

Kelso Place has purchased a number of businesses out of insolvency and has a track record of successfully growing those businesses over a number of years before exiting. Examples include financial recruitment firm Nigel Lynn Associates, which was sold to Premier Recruitment Group in 2005, Sepura, a leading global supplier of TETRA radio terminals, which was sold via an IPO on the London Stock Exchange in 2007 and i2S Group, a building technology business, which sold its controls division to Carrier Corporation, a unit of United Technologies Corporation, in late 2009.

The Kelso Place team includes eight investment professionals, with a broad range of investment, turnaround, operational and financial management skills. Kelso Place Asset Management is authorised and regulated by the Financial Services Authority.

www.kelsoplace.com