Caledonia Regulatory News (CLDN)

Caledonia Investments acquires Direct Tyre Management

Caledonia Investments plc ("Caledonia") is pleased to announce that it has invested £55m to acquire a majority stake in Direct Tyre Management Limited ("DTM" or the "Business"), the UK's leading independent provider of outsourced tyre management services to fleet operators. The management team has reinvested alongside Caledonia to acquire 100% of the Business from investors including Palatine Private Equity.

The acquisition exemplifies Caledonia's strategy of investing in quality, robust and well-established companies, with proven management teams seeking a long-term supportive shareholder.

Founded in 2004, DTM provides specialist, independent outsourced tyre management services. The Business has consistently delivered year-on-year growth with a revenue CAGR of c.16% over the last 15 years.

Headquartered in Blackpool, DTM has over 100 employees and serves c.250 fleet customers with c.285,000 vehicles and c.1,300,000 tyres under management. Enabled by a proprietary technology platform, which allows customers to maximise their fleet efficiency, compliance and output, DTM connects the vehicles it manages to a national network of over 3,500 service provider locations.

Commenting on the acquisition, Tom Leader, Caledonia's Head of Private Capital, said:

"We are proud to have become the new owners of DTM and to partner with Leigh Goodland and his team in the next stage of the company's development. DTM's consistent track record of revenue growth and cash generation, together with its market leading position, make the Business an exciting addition to our Private Capital investment portfolio. We believe there are multiple avenues through which to build further on the Business' excellent record and to expand its range of services in the UK and other jurisdictions."

Leigh Goodland, DTM's CEO, commented:

"I am delighted to welcome Caledonia as DTM's new equity partner. With Caledonia's financial support, flexibility and long-term investment horizon, I am confident that we can build on the Business' reputation for outstanding customer service and track record of innovation to bring new technology to our customers and take advantage of the significant growth potential in our chosen markets."

19 August 2024

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Notes for editors:

Caledonia Investments plc

Caledonia is a FTSE 250 self-managed investment trust company with a long track record of delivering consistent returns and progressive annual dividend payments to shareholders.

Our aim is to generate long-term compounding real returns that outperform inflation by 3%-6% over the medium to long term, and the FTSE All-Share index over 10 years.

We are a long-term investor and hold investments in both listed and private markets across three pools: Public Companies, Private Capital and Funds. Each has a strategic allocation of capital, investment strategy and target return. The result is a well-balanced diversified portfolio of investments with a global reach.

Within its Private Capital pool Caledonia typically seeks to invest between £50m and £150m in private companies, either on a majority or minority basis, where Caledonia provides enduring capital and support to investee company management teams over the longer term. The Caledonia Private Capital portfolio includes AIR-serv Europe (a leading designer and manufacturer of air, vacuum and jet wash machines provided as turn-key solutions to fuel forecourt operators across Western Europe), Stonehage Fleming (a multi-family office providing fiduciary and investment management services to UHNW clients and families), Cobehold (the holding company of Cobepa, a European unquoted investment house), Cooke Optics (a UK manufacturer of premium cinematography lenses), and Liberation Group (a pub, restaurant and drinks business with a pub estate stretching from Southwest London to Bristol and the Channel Islands).

For additional information on Caledonia Private Capital, please visit www.caledoniaprivatecapital.com and for Caledonia please visit www.caledonia.com.

Transaction

Caledonia's investment in DTM was led by Theo Tizard, James Lander, Dan Lock and Joe Carter Hepplewhite.

Travers Smith (Adam Orr, Alex Dixon and Rachel MacAthur) provided legal advice, OC&C (Nic Farhi, Mark Jannaway and Haleh Taghinejadi) provided commercial advice, Deloitte (Tim Haden and Sam Ward) provided tax advice and PwC (James Tubby and Josh Whittingham) provided financial due diligence.

Clearwater Corporate Finance (Michael Loudon and James Malcharek) provided corporate finance advice to the vendors and legal advice was provided by Gateley (Rebecca Grisewood and Kate Richards). Commercial due diligence was provided by CIL (Jon Whiteman) and financial and tax due diligence was provided by PwC (Sid Hussain and Emma Sutherland).

DTM operated as an independent division of NRG Fleet Services group ("NRG"). In April 2024, DTM was legally separated from NRG when Astatine Investment Partners acquired the remainder of NRG's business and operations.

Neither the contents of Caledonia's nor DTM'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.