Caledonia Regulatory News (CLDN)

CALEDONIA INVESTMENTS AGREES TO ACQUIRE GALA BINGO

Caledonia Investments plc ("Caledonia") announces that it has agreed terms to acquire Gala Bingo Holdings Limited ("Gala Bingo"), the UK's largest retail bingo operator, from Gala Coral Group Limited ("Gala Coral") in a transaction which values the business at £241m.

Led by Chief Executive Officer, Simon Wykes, and Chief Finance Officer, Alex Wood, Gala Bingo has a 38% share of the UK retail bingo market, operating a national estate of 130 clubs with over 1.1 million active members. For its financial year to 26 September 2015, adjusted on an unaudited basis to show the standalone business being acquired, Gala Bingo reported EBITDA of £52.7m and profit before tax of £33.0m and had gross assets at that date of £189.6m.

On completion, which is subject to change of control approval of the Gambling Commission and finalisation of a £155m senior debt facility, Caledonia will invest £97.8m in cash to acquire 99.5% of the equity of Gala Bingo, with the management team subscribing a further £0.5m.

The acquisition will not include Gala Coral's branded online bingo offering, galabingo.com, which will be retained by the vendor.

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

"Gala Bingo is well known to Caledonia's Unquoted Investments team and we are delighted to be backing Simon Wykes and his team in the next chapter of its history. Its defensive, enduring business model, which delivers strong cash generation and dividend yield, fit ideally with the investment criteria sought by Caledonia for its unquoted portfolio and complements our other assets in the Unquoted pool. As with our other unquoted investments, Gala Bingo will pay an attractive yield from inception."

Simon Wykes, Gala Bingo's Chief Executive Officer, commented:

"We are delighted to have secured Caledonia's backing in the next phase of Gala Bingo's development. We believe that Caledonia's longer term, supportive investment model will give Gala Bingo the stable platform from which we can continue to develop our market leading business."

26 October 2015

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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 September 2015. The company maintains a concentrated portfolio of international quoted, unquoted and fund investments and has paid an increasing annual dividend for 48 years.

In the unquoted arena, Caledonia seeks to invest up 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), The Sloane Club (a London residential club), Choice Care Group (a UK learning disability care homes provider) and Seven Investment Management (a provider of discretionary fund management, asset management and self-invest platform services).

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

Gala Bingo

Formed in 1991, Gala Bingo is the UK's largest retail bingo operator with a 38% market share. Headquartered in Nottingham, it has operates 130 clubs throughout the UK and has over 1.1 million active members, being customers who have visited a club within a 52 week period.

Gala Bingo's principle revenue streams are Main Stage Bingo (structured lunchtime and evening sessions centred on a 90 number based game), Party Xtra (a quicker 80 number game played in the intervals between MSB games), electronic gaming machines and food and beverage.

For additional information on Gala Coral and Gala Bingo, please visit www.galacoral.co.uk.

Transaction

Caledonia's investment in Gala was led by Charlie Edwards, Andy Powell, Jayne Mould and Tarquin Wethered. Sally Flanagan and Charlie Edwards will join the board of Gala Bingo at completion.

Holihan Lokey (George Fleet) provided corporate finance advice to Caledonia whilst legal advice was provided by Osborne Clarke (Mark Spinner) and tax advice by Deloitte (Tim Haden). Gala Coral were advised by Ashursts and the management team was represented by Brown Jacobson. KPMG provided financial due diligence services to the vendor.

Neither the contents of Caledonia's nor Gala Coral'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.