Caledonia shifts management consultancy

Caledonia Investments has sold its stake in Celerant Consulting Investments, the global operations management consultancy, to Hitachi Consulting Corporation.

The deal to offload its 47.3% equity holding in Celerant will net the FTSE 250 investment trust £43.3m after the repayment of outstanding loan notes and accrued interest.

A further £4.3m equivalent will be placed in escrow in respect of warranties, completion balance sheet adjustments and other items.

Any of this money that is not spent will be released over time as the various escrow periods expire, the firm said.

Caledonia originally invested £20.3m in Celerant in May 2006, backing a management buy-out from Novell Inc. through a combination of equity and loan notes.

Since then, Caledonia has received £9.6m in loan note repayments and interest and the residual investment was held in Caledonia's condensed group statement of financial position at 30th September 2012 at a value of £19.6m.

The disposal will deliver a net internal rate of return to Caledonia of 27.9% and a multiple of 3.5x cash invested.

The initial sale proceeds will be held on deposit for future investment, the trust added.

Duncan Johnson, Caledonia's Head of Unquoted Investments, said Celerant would fit well into Hitachi's growing consultancy business.

"[We] are delighted that Caledonia's long term, supportive investment approach has both contributed to its development and delivered good returns for our shareholders," he said.