If you thought the snow was bad for your business, spare a thought for the poor British School of Motoring (BSM). The extended cold snap saw a marked decrease in lessons as pupils spurned icy roads and harsh driving conditions. Cashflow was severely impacted and the company officially ceased trading in January this year.
BSM operates on a franchise model, with more than 2,100 operators across the UK. Over 30,000 pupils are currently learning to find the biting point, change gears and execute a three-point turn with the company.
The downfall of this iconic, century-old brand began on November 29, 2010, when BSM's directors approached PwC to quietly scout a buyer for the ailing business. This process began on December 16. But despite plenty of interest, none of the buyers were keen on a solvent sale. Who wants to acquire a heap of debts and liabilities, when BSM could quietly go into administration and get picked up for pocket change?
PwC handled the administration and, within six weeks, turned around an exceptionally quick sale to AA Developments. In a 'white knight' deal with BSM, the AA is assuming responsibility for all BSM franchise agreements and pupils. The business will continue as a going concern. The transition should be almost completely painless - unless you're a BSM supplier (the only party likely to be left out of pocket).
"BSM has faced difficulties in 2010, particularly with three months of disrupted trade due to snow conditions in January, February and December in many parts of the country," says PwC partner Matthew Hammond. "The preservation of the business through the immediate sale to AA for the drivers, students and employees was vitally important and we are delighted to have achieved this,"
BSM's 135 staff at the head office in Bristol, and the further 145 located in 71 network centres located across the UK are all now automatically employees of the AA.
The deal is a touch for the AA, which now rises to the top of the motoring pool as the largest driving school in the UK.