Caledonia Private Capital sells DSE

CALEDONIA INVESTMENTS PLC

CALEDONIA PRIVATE CAPITAL SELLS DSE

Caledonia Investments plc ("Caledonia") is pleased to announce that its portfolio company Deep Sea Electronics ("DSE"), a leading provider of backup power control systems, has been acquired by Generac Holdings Inc. ("Generac"). Generac is listed on the New York Stock Exchange (NYSE: GNRC) and is a leading global designer and manufacturer of energy technology solutions and other power products.

DSE was acquired by Caledonia in October 2018 and has grown strongly since then.  It has secured a larger share of core target markets having developed and launched power control products in load-sharing and synchronisation; successfully captured adjacent market opportunities with new products in off-highway control; and is addressing the control needs of a growing number of customers seeking distributed power solutions enabled with intelligence and data capture. Throughout the partnership with Caledonia, DSE has been led by Chief Executive David Thomson who will retain overall responsibility for DSE following the sale, under the direction of Patrick Forsythe, Generac's Chief Technical Officer.

Caledonia will receive net proceeds of c.£242.2m in cash, net of fees, for the sale of its 84.2% fully diluted stake. The cash proceeds will be held on deposit for future investment. DSE was held in Caledonia's audited accounts as at 31 March 2021 at £193.0m.

Commenting on the sale, Duncan Johnson, Caledonia's Head of Private Capital, said:

"Caledonia's Private Capital strategy is to invest in leading UK businesses with high quality management teams, and DSE and Dave Thomson have embodied this. We are delighted with what DSE has achieved under our ownership, having encouraged focused investment in both short- and long-term growth initiatives, whilst maintaining strong alignment with Dave and his team.  We thank and congratulate Dave and the DSE team for their stewardship of DSE during our partnership and wish them all every success under their new ownership."

David Thomson, Chief Executive of DSE, commented:

"Caledonia has been a fantastic partner both for me and for DSE, providing board level support, long-term thinking and constructive challenge over the past two and a half years.  Caledonia has helped me to lay the foundations for DSE's future growth by strengthening my team, supporting investments in new products and channels to market, and positioning DSE strategically for emerging opportunities in renewable/ distributed power and microgrid generation.  We have forged ahead despite the Covid-19 pandemic and I am incredibly excited about a new era of partnership with Generac."

1 June 2021

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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 £2.2bn as at 31 March 2021. The company maintains a concentrated portfolio of international quoted, private, and fund investments and has paid an increasing annual dividend for 54 years.

In the Private Capital arena Caledonia typically seeks to invest £25m to £125m in privately owned companies based in the UK, 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 7iM (a provider of discretionary fund management, asset management and self-invest platform services), Stonehage Fleming (a multi-family office providing fiduciary and investment management services to UHNW clients and families), Cobehold (a European unquoted investment house), Cooke Optics (a UK manufacturer of premium cinematography lenses), and Liberation Group (a Channel Islands and South West England integrated pub and brewing business).

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

Deep Sea Electronics

Based in the UK, DSE is one of the world's leading designers and manufacturers of controllers for backup electricity generators and intelligent battery chargers. Its products are used globally to support public sector infrastructure projects as well as diverse applications across industry sectors, including oil and gas, telecommunications, construction, power distribution and facilities management.

Founded in 1975, DSE has been led by Managing Director David Thomson since 2012. It is headquartered in Hunmanby, Yorkshire where all its products are manufactured, and has a design team based in Mansfield, Nottinghamshire.  DSE employs over 160 people and with teams on the ground in North America, the Middle East and India operates globally selling to over 150 countries, both direct and through a comprehensive distributor network.

For additional information on DSE, please visit www.deepseaelectronics.com.

Generac Holdings Inc (NYSE: GNRC)

Founded in 1959, Generac is a leading global designer and manufacturer of a wide range of energy technology solutions and other power products. As an industry leader serving residential, light commercial, and industrial markets, Generac's products and solutions are available globally through a broad network of independent dealers, distributors, retailers, e-commerce partners, wholesalers and equipment rental companies, as well as sold direct to certain end user customers.

For additional information on Generac, please visit www.generac.com.

Transaction

The sale of DSE was led by Chris Hodges and Theo Tizard for Caledonia.

GCA Altium (Stuart Warriner and Andy Battersby) and Taylor Wessing (Ed Waldron and Jonny Bethell) respectively provided corporate finance and legal advice to Caledonia.

Neither the contents of Caledonia's, DSE's or Generac'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.