Caledonia Regulatory News (CLDN)

CALEDONIA INVESTMENTS PLC

SALE OF INVESTMENT IN PARK HOLIDAYS UK

Caledonia Investments plc ("Caledonia") is pleased to announce that it has agreed terms for the sale of Park Holidays UK ("Park Holidays"), the UK's third largest holiday park operator, to Tiger Bidco Limited, a special purpose vehicle incorporated by Intermediate Capital Group plc ("ICG"), for a headline enterprise value of £362m. Caledonia will receive £197m in cash, net of fees, for the sale of its 81.5% fully diluted equity stake. The net proceeds will be held on deposit for future investment.

The net proceeds represent a premium of 47% to Caledonia's carrying value of Park Holidays at 30 September 2016 of £134m and are in addition to £41m of cumulative distributions that the Caledonia group has received from Park Holidays since it acquired the business in 2013. Overall, Caledonia will have realised a net IRR of 44% and a money multiple of 2.9x from its investment in Park Holidays.

Park Holidays was originally acquired by Caledonia in November 2013 for a headline valuation of £172m. At that time, Caledonia backed Park Holidays' incumbent senior management team of Jeff Sills (Chief Executive), Al Loch (Chief Financial Officer), Tony Clish (Commercial Director) and Adrian Fawcett (non-executive Chairman), all of whom will remain in place following the sale to ICG.

Under Caledonia's ownership, Park Holidays accelerated capital investment across the estate driving further revenue growth in addition to increasing the number of parks it operates from 23 to 26. These actions supported strong growth in profitability with EBITDA expected to be up 79% from £20.4m (for the year ended 31 December 2012) to an estimated £36.5m (for the year ending 31 December 2016).

Completion of the transaction is conditional on the approval of the Financial Conduct Authority which could take up to three months.

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

"Caledonia's unquoted strategy is to invest in leading businesses which combine an ability to grow profits whilst also paying a healthy annual cash return to shareholders. Park Holidays has delivered in every respect and we congratulate Jeff Sills and his team, as well as the company's Chairman, Adrian Fawcett, for their stewardship of the business over the past three years. We wish them and the business every success in the future."

Jeff Sills, Chief Executive Officer of Park Holidays, commented:

"We were attracted to Caledonia because of its unique investment model. Caledonia has proved to have been a very supportive financial partner over the past three years, which has enabled us both to acquire new sites and improve the quality of our existing estate. We look forward to continuing to deliver good returns for our new investor."

Will Wyatt, Chief Executive of Caledonia, stated:

"Park Holidays has been an outstanding investment for Caledonia and we are delighted with the progress it has made since we became involved in 2013. It exemplifies our ability to find and attract capable management teams and I am delighted that the outcome has been so successful for both us and Jeff Sills and his colleagues."

19 December 2016

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This announcement contains inside information relating 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 £1.7bn as at 30 November 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. In addition to Park Holidays, its current unquoted portfolio includes 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 Liberation Group (the market leading Channel Islands pub, restaurants and drinks business), 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.

Park Holidays

Park Holidays was originally established in 1985 under the name Cinque Ports Leisure Limited by Peter Bull and Jim Watson and subsequently sold in 2006 to a management buy-in led by Jeff Sills, Al Loch and Tony Clish. The business was rebranded Park Holidays UK in 2007.

Park Holidays' portfolio currently has a total of c. 10,000 developed caravan pitches, 76% of which are owner occupied and 14% of which are hired out to holiday makers on a short term basis.

For additional information on Park Holidays, please visit www.parkholidays.com.

Transaction

The sale of Park Holidays was led by Andy Powell and Tim Lewis for Caledonia.

PricewaterhouseCoopers (Rick Jones) provided corporate finance advice to Caledonia, with legal advice provided by Macfarlanes (Stephen Drewitt), vendor financial due diligence by KPMG (Barry Carter) and vendor commercial due diligence by CIL (Alex Marshall). Management was advised by Wyvern Partners (Martin Kitkatt) and DWF (Mark Gibson).

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