PRIVATE equity house Kelso Place has acquired the company behind Red Driving School, rescuing the stricken driving school from administrators.
The firm is this week expected to announce it is buying the business and assets of Landsdowne Venture Group (LVG), which runs the Red student driver operation and the UK’s biggest driving instructor training school.
Kelso Place said that it dipped into its £100m special situations fund to make the acquisition after LVG was taken over by administrators MCR on 16 February.
“We invest in special situations [like this] and we made this acquisition very quickly. The company has a very solid business and so it will very much be business as usual,” said Kelso Place partner Philip Weston.
Weston said that Kelso Place will continue trading Red’s business as usual and doesn’t anticipate that it will have to make any of its existing 400 staff members redundant.
Some of the funds used in the acquisition will be paid to MCR, while the remainder will go into Red’s business.
Weston said: “We are really continuing with [Red’s] existing strategy. Red has a dominant market share in instructor training and the driving school is growing fast. We intend to continue to grow that business.”
LVG went into administration last Tuesday after the company failed to meet cash reserve demands when it changed banks.
The driving school, which launched more than a decade ago, last year turned over £40.5m.
Kelso Place, known for rescuing UK-based businesses in financial difficulty, successfully closed its special situations fund in December last year, making it the fourth fund it has launched since 2001.
It has since invested in 11 companies, including luxury brand Smythson and handbag maker Anya Hindemarch.