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Dunedin makes 5.8x cash on Caledonian sale

The Edinburgh- and London-based mid-market investor has sold a UK modular building company for £62m.

UK mid-market private equity firm Dunedin Capital Partners has sold Calsafe Group, a UK modular building business, to Champion Enterprises of the US for £62 million (€89 million; $108 million).
 
Dunedin generated a money multiple of 5.8x and an IRR of 110 percent over the two and a half years since its original investment. The firm backed a £37 million management buyout of Calsafe, which operates in the UK through its subsidiary Caledonian Building Systems, in November 2003.
 
Dougal Bennet, a director in Dunedin’s London office, said in an interview that the firm invested equally from both its Dunedin Buyout Fund, which closed in December 2002 with total commitments of £54 million, and publicly-quoted investment trust Dunedin Enterprise Investment Trust.
 
The Buyout Fund is now more than 75 percent invested, added Bennet.
 
Bennet said Dunedin had worked on increasing Caledonian’s capacity by around 60 percent under its ownership, partly through the introduction of a third factory on its site. “We also moved away from purely focusing on prison manufacture into hotels, residential and contracts for Ministry of Defence barracks,” he said.
 
Clearwater Corporate Finance provided financial advice to Dunedin and the management team, with legal advice from HBJ Gateley Wareing.
 
Caledonian was established in 1997 to provide pre-engineered buildings and off-site construction, specialising in the design and provision of multi-story commercial and residential structures using steel modular systems.
 
Headquartered in Newark, Nottinghamshire, Caledonian has an annual turnover of £90 million, according to Dunedin.
 
Last month, Dunedin sold UK pubs operator Celtic Inns to The Wolverhampton & Dudley Breweries for £43.6 million, generating a 2.5x money multiple.

The Edinburgh and London-based firm specialises in mid-market buyouts with transaction sizes between £10 million and £50 million in the construction and building materials, consumer products and services, financial services, healthcare, leisure, media, specialist manufacturing and support services sectors.