Caledonia Regulatory News (CLDN)

CALEDONIA INVESTMENTS AGREES TO ACQUIRE THE LIBERATION GROUP

Caledonia Investments plc ("Caledonia") announces that it has agreed terms to acquire The Liberation Group Limited ("Liberation"), the Channel Islands' market leading pub, restaurant and drinks business, from LGV Capital, part of Legal & General Capital, the principal investment arm of Legal & General Group, in a transaction which values Liberation at £118m.

Led by Chief Executive Officer, Mark Crowther, and Finance Director, Declan Hearne, Liberation operates 94 predominantly freehold pubs in the Channel Islands and south west of England, as well as two breweries, Liberation Brewery (Channel Islands) and Butcombe Brewery (mainland UK), and three drinks distribution businesses (two in the Channel Islands and one in mainland UK). For the 52 week period to 30 January 2016, Liberation reported EBITDA of £10.6m, profit before tax of £1.9m and had gross assets at that date of £112.8m. Liberation is enjoying steady growth in trading for the current year.

Caledonia's strategy will be to continue to build Liberation through a combination of enhanced organic growth driven by targeted capital expenditure within the pub estate and acquisitions of both individual pubs and pub groups in the south of England. Caledonia will make additional capital available to Liberation to effect this strategy. Richard Grainger, previously chairman of, amongst others, Close Brothers Corporate Finance Limited and Safestore Holdings plc, will join the group board as Chairman at completion.

On completion, which is subject to the approval of the Channel Islands Competition and Regulatory Authorities, Caledonia will invest £70.6m in cash to acquire a 98% equity stake, with Liberation's management team subscribing a further £1.4m. The balance of the purchase costs will be funded by bank debt of £51m, which Caledonia has agreed to underwrite in the event that this is not in place by completion.

Commenting on the acquisition, Duncan Johnson, Caledonia's Head of Unquoted Investments, said:

"Caledonia has developed a strong relationship with Mark Crowther and his team over a number of years and we are delighted to become Liberation's new financial partner. We are attracted to the business by its high quality pub estate and leading position in the markets in which it operates. We believe that with Caledonia's longer term support Liberation will be ideally placed to take advantage of growth opportunities, both within its existing estate and through further selective acquisitions. Liberation will complement the other defensive, asset-backed and cash generative leisure businesses in our unquoted portfolio. The investment will pay an attractive yield from inception."

Mark Crowther, Liberation's Chief Executive Officer, commented:

"Following LGV's successful period of ownership, we are delighted to welcome Caledonia as our future new owner. We believe that with Caledonia's financial support and long term investment horizon, we can continue to build on our justifiable reputation for quality products and service and extend our market leading business further into the UK mainland."

6 July 2016

For further information contact:

This announcement contains inside information in relation to Caledonia.

END

Notes for editors:

Caledonia Investments plc

Caledonia is a self-managed investment trust company listed on the London Stock Exchange with net assets of approximately £1.6bn as at 30 June 2016. The company maintains a concentrated portfolio of international quoted, unquoted and fund investments and has paid an increasing annual dividend for 49 years.

In the unquoted arena, Caledonia seeks to invest £25m to £100m in private companies, either on a majority or minority basis, providing a meaningful presence and growth capital supporting double-digit operating margins. Its current unquoted portfolio includes Park Holidays (a UK caravan parks operator), Cobehold (a European unquoted investment house), Gala Bingo (the UK market leading retail bingo operator), Seven Investment Management (a provider of discretionary fund management, asset management and self-invest platform services), The Sloane Club (a London residential club) and Choice Care Group (a UK learning disability care homes provider).

For additional information on Caledonia, please visit www.caledonia.com.

The Liberation Group Ltd

Liberation was formed in 2008 following a LGV Capital financed management buy-in/buy-out of the hospitality division of Sandpiper CI, a Channel Islands trading conglomerate (previously CI Traders). Liberation's pub estate however has a history dating back to 1830 and its Channel Islands brewery is 145 years old. In early 2015, it gained its first foothold on the UK mainland through the purchase of Butcombe, the West Country based integrated pub and brewing company.

Liberation currently operates 94 predominantly freehold pubs located in Jersey (45 pubs), Guernsey (26 pubs), Alderney (3 pubs) and mainland UK (20 pubs) as well as owning two breweries, Liberation Brewery (Channel Islands) and Butcombe Brewery (UK). Liberation also owns three drinks distribution businesses, Victor Hugo (Jersey) Bucktrout & Co (Guernsey) and Butcombe (mainland UK).

For additional information on Liberation, please visit www.liberationgroup.com.

Transaction

Caledonia's investment in Liberation was led by Tim Lewis, Duncan Johnson and Jayne Mould.

Houlihan Lokey (George Fleet) provided corporate finance advice to Caledonia, with legal advice and due diligence provided by Macfarlanes (Stephen Drewitt), tax advice by Deloitte (Tim Haden) and debt advisory services by Wyvern Partners (Mike Barnes). LGV Capital was advised by Sapient Corporate Finance (Fraser Anderson and Peter Hansen) and CMS (Martin Treagus). Liberation's management team was represented by Cornerstone Corporate Finance (David Lilley and Ben Hewetson) and Travers Smith (Adam Orr). KPMG provided financial due diligence services to the vendor.

Neither the contents of Caledonia's nor Liberation's websites, nor the contents of any website accessible from hyperlinks on these websites (or any other website) is incorporated into, or forms part of, this announcement.