Caledonia Regulatory News (CLDN)

CALEDONIA INVESTMENTS PLC

SALE OF CHOICE CARE GROUP

Caledonia Investments plc ("Caledonia") is pleased to announce the sale of Choice Care Group ("Choice"), a leading provider of residential and supported living services for people with learning disabilities and mental health conditions, to iCON Infrastructure Partners, IV L.P., a fund advised by iCON Infrastructure LLP ("iCON"), an independent infrastructure investment group with approximately €2.5bn of assets under management.

Choice was originally acquired by Caledonia in August 2013 and, with its support, has implemented an organic growth strategy, which has increased its residential capacity by some 32%, from 391 to 514 beds. Choice has invested significantly in its head office and central overhead functions, both of which have helped the business to retain market leading compliance ratings with the Care Quality Commission. Throughout the period of Caledonia's ownership, Choice has been led by Chief Executive Edwina Johnston, who will remain with the company following the sale.

The transaction values Choice at an enterprise value of £152.5m, of which Caledonia will receive £99.4m in cash, net of fees, for the sale of its 87.4% fully diluted stake. The proceeds include pre-sale dividends of £7.1m.

Choice was originally acquired at a headline valuation of £86.0m, with Caledonia subscribing £49.5m in cash for an initial 97.7% stake. Since then, Caledonia has invested a further £5.4m in the business and, in addition to the pre-sale dividends referred to above, has received dividend distributions of £6.1m. The investment was held in Caledonia's audited accounts as at 31 March 2018 at £81.9m and was revalued at 30 September 2018 to £93.2m. Overall, Choice has delivered to Caledonia a net IRR of 14.3% and a money multiple of 1.9x. The net proceeds will be used to repay, in part, amounts drawn under Caledonia's committed term facilities in connection with the recent acquisition of Deep Sea Electronics Ltd.

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

"Caledonia's unquoted strategy is to invest in leading businesses with quality management teams, seeking long-term capital. We are delighted with how Choice has grown under our ownership, enabling it to provide its high quality residential services to a third more patients than five years ago, and we congratulate Edwina and her team for their stewardship of the business during that time. We wish them and the company every success under their new ownership."

Edwina Johnston, Chief Executive of Choice, commented:

"Caledonia has been a very supportive and involved financial partner over the past five years, which has enabled us both to develop new homes and improve the quality of our existing services. We look forward to continuing to deliver high quality care to our service users under our new ownership."

23 October 2018

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This announcement contains inside information relating to Caledonia.

END

Notes for editors:

Caledonia Investments

Caledonia is a self-managed investment trust company listed on the London Stock Exchange with net assets of £2.0bn as at 30 September 2018. The company maintains a concentrated portfolio of international quoted, unquoted and fund investments and has paid an increasing annual dividend for 51 years.

In the unquoted arena, Caledonia typically 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 Seven Investment Management (a provider of discretionary fund management, asset management and self-invest platform services), Deep Sea Electronics (a manufacturer of precision engine and generator controls and intelligent battery chargers), Cobehold (a European unquoted investment house), Cooke Optics (a UK manufacturer of premium cinematography lenses), Buzz Bingo (the UK market leading multi-channel bingo operator) and Liberation Group (a Channel Islands and South West England integrated pub and brewing business).

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

Choice Care Group

Founded in 1992, Choice is headquartered in Bracknell and currently owns and operates 60 residential community homes across Berkshire, Buckinghamshire, Gloucestershire, Hampshire, Surrey and Wiltshire. It cares for people with learning disabilities or mental health conditions, specialising in working with individuals who have highly complex needs. In addition, Choice provides supported living services for clients in Berkshire, Hampshire, Surrey and the Midlands.

Choice employs over 1,800 people throughout its business.

Choice is committed to delivering exceptional outcomes, giving the people it supports the opportunity to lead a full and active life within their local communities and continue with life-long learning and personal development.

For additional information on Choice, please visit www.choicecaregroup.com.

iCON Infrastructure

iCON is an independent investment group with approximately €2.5bn of assets under management, focusing on privately held investments in infrastructure assets in Europe and North America.

iCON's investments span a range of infrastructure sectors, including water, transportation, energy generation, distribution and storage. Choice is its first investment in the social infrastructure space.

For additional information on iCON, please visit www.iconinfrastructure.com.

Transaction

The sale of Choice was led by Charlie Edwards and Tom Leader for Caledonia.

PwC (Issy Corbett and Joe Katz) and Osborne Clarke (Mark Spinner) respectively provided corporate finance and legal advice to Caledonia.

Neither the contents of Caledonia's, Choice's or iCON's 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.