Caledonia selling Choice Care Group – Caledonia Investments is selling Choice Care Group, a 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, an independent infrastructure investment group with approximately EUR2.5bn 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 deal values Choice at an enterprise value of £152.5m. Caledonia will receive £99.4m in cash for the sale of its 87.4% fully diluted stake. 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 and has received dividend distributions of £6.1m.
1.9x money invested
The investment was revalued at 30 September 2018 to £93.2m. Overall, Choice has delivered to Caledonia a net IRR of 14.3% and 1.9x its investment. The net proceeds will be used to help repay the debt used to buy Deep Sea Electronics Ltd.
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.”
CLDN : Caledonia selling Choice Care Group