Revised Possible Offer for Cambian Group PLC

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND THERE CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE MADE EVEN IF THE PRE-CONDITIONS ARE SATISFIED OR WAIVED

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014

FOR IMMEDIATE RELEASE 24 July 2018

CareTech Holdings PLC

("CareTech" or the "Company")

Revised possible offer for Cambian Group PLC and shareholder support

CareTech Holdings PLC (AIM: CTH), a pioneering provider of specialist social care services in the UK, confirms that on 23 July 2018 it submitted a revised proposal to the Board of Cambian Group PLC ("Cambian") (the "Proposal").

Terms of the Proposal

· Holders of Cambian shares (the "Cambian Shareholders") to receive 0.267 new CareTech shares and 100 pence in cash for each Cambian share (the "Headline Offer")

· The Headline Offer represents:

o on the basis of CareTech's undisturbed closing share price on 9 July 2018 (being the last practicable date prior to the first announcement of a possible offer for Cambian) of 375.0 pence, the Headline Offer represents a value of 200.1 pence per Cambian share or a premium of 35 per cent. to Cambian's undisturbed closing share price as at 9 July 2018 of 148.2 pence;

o on the basis of a 90 trading day volume weighted average closing share price on 9 July 2018 of 394.7 pence for CareTech, the Headline Offer represents a value of 205.4 pence per Cambian share or a premium of 16 per cent. to Cambian's 90 trading day volume weighted average closing share price on 9 July 2018 of 176.8 pence; and

o on the basis of CareTech's closing share price on the last practicable date prior to the publication of this announcement (23 July 2018, or the "Last Practicable Date") of 380.0 pence, the Headline Offer represents a value of 201.5 pence per Cambian share or a premium of 9 per cent. to Cambian's closing share price as at the Last Practicable Date of 185.0 pence.

· As an alternative to the Headline Offer, Cambian Shareholders can elect for a full cash alternative at 190.0 pence in cash for each Cambian share (the "Cash Alternative"). The Cash Alternative provides Cambian Shareholders with the ability to receive 100 per cent. cash (instead of the cash and new CareTech shares to which they would otherwise be entitled under the terms of the Headline Offer) at an attractive premium of 28 per cent. to the undisturbed closing Cambian share price as at 9 July 2018.

Shareholder support for the Proposal

CareTech has received irrevocable undertakings to support the Proposal from the following Cambian Shareholders:

· Richard Griffiths and controlled undertakings in respect of 19,025,906 Cambian shares representing approximately 10.33 per cent. of the ordinary share capital of Cambian in issue on the Last Practicable Date (the "Richard Griffiths Irrevocable"); and

· Lombard Odier Asset Management (Europe) Limited ("LOAME") in respect of 20,506,412 Cambian shares representing approximately 11.13 per cent. of the ordinary share capital of Cambian in issue on the Last Practicable Date (the "Lombard Odier Irrevocable").

In total, therefore, CareTech has received irrevocable undertakings to support the Proposal in respect of an aggregate of 39,532,318 Cambian shares representing, in aggregate, approximately 21.46 per cent. of the ordinary share capital of Cambian in issue on the Last Practicable Date.

Further details of the Richard Griffiths Irrevocable and the Lombard Odier Irrevocable are set out in Appendix 1.

Benefits of a combination for Cambian and CareTech shareholders

CareTech believes that a combination with Cambian (the "Enlarged Group") has a clear and compelling strategic rationale for shareholders, local authorities and service users of both companies:

· Unique opportunity for investors to enhance exposure through a market leader in the highly attractive UK market for social care services for children and adults: The Enlarged Group would be the second largest UK social care operator by revenue and the only one with a UK listing. The UK social care sector is among the most attractive growth segments of the UK healthcare services market driven by increased public outsourcing, a growing demand for specialist services, a shortage of suitable supply and a requirement for improved outcomes. The increased scale of the Enlarged Group provides the opportunity to increase the provision of services, improve access to health commissioners and improve outcomes for service users.

· Highly complementary service offering and geographical coverage providing a nationwide integrated care pathway focused on higher acuity social care: A combination would provide an opportunity to create a leading and diversified operator in the higher acuity social care sector for adults and children in the United Kingdom. CareTech's offerings in learning disabilities and specialist services for adults and residential services for young people is highly complementary to Cambian's positions in children's residential care, specialist education and therapeutic fostering. More specifically, combining CareTech's higher acuity residential and transitional care services together with Cambian's specialist education and schools would provide a holistic wraparound children's service. In addition, CareTech's fostering services across mainstream, specialist and family assessments would reinforce the therapeutic services provided by Cambian. Furthermore, CareTech has an apprenticeship offering through the Learning Division which places young people into meaningful employment. A combination would also broaden the geographical reach of the network, providing a truly nationwide offering. CareTech would provide access to key areas where Cambian does not currently operate, including Scotland, Wales, and Greater London.

· Combined operational expertise to better service local authority partners, deliver strong user outcomes, and implement positive staff engagement: Shared best operational practices across the Enlarged Group would ensure a robust and sustainable operating model to better serve partners and service users. The Enlarged Group would also provide a strong platform of development opportunities for employees, fostering a positive workplace culture and promoting staff continuity. Through the combination, Cambian would be able to leverage CareTech's highly developed recruitment and retention functions which have led to CareTech achieving staff turnover rates of 21 per cent., which CareTech believes is substantially better than the sector average. This would lead to the Enlarged Group having strong quality ratings and position it as a preferred partner for local authorities and health services commissioners. Moreover, CareTech's Developed Learning Services division, which assists young people in obtaining employment opportunities and apprenticeships would augment Cambian's services and care pathway.

· Opportunity to unlock significant value through a compelling strategic fit, tangible near-term synergies and enhanced trading liquidity: CareTech has a long track record of successful acquisitions, having undertaken multiple transactions over the past decade which have been successfully integrated and benefited from being part of an enlarged group. CareTech anticipates a combination of CareTech and Cambian would deliver significant synergies, continuation of aligned strategies, sharing of best practices and optimise investments in strategic initiatives. The share component of the Headline Offer provides Cambian Shareholders with the opportunity to participate in a continuation of this successful track record of growth and value creation.

Pre-Conditions of the Proposal

This announcement does not constitute a firm intention to make an offer under Rule 2.7 of the Code and there can be no certainty that any firm offer will be made.

Further announcements will be made as appropriate and shareholders are strongly advised to take no action for the time being.

The making of any firm offer by CareTech would be subject to the following pre-conditions (which may be waived in whole or in part by CareTech):

· The satisfactory completion of confirmatory due diligence to be undertaken by CareTech and its financing banks;

· unanimous recommendation by the directors of Cambian to vote in favour to accept the Proposal;

· Richard Griffiths and controlled undertakings, LOAME and Teleios Capital Partners LLC each giving irrevocable undertakings on satisfactory terms to vote in favour of the Proposal and not to elect (or procure the election) for the Full Cash Alternative in respect of their interests in Cambian shares;

· Final approval by the board of CareTech.

Pursuant to Rule 2.5 of the Code, CareTech reserves the right to introduce other forms of consideration and/or vary the form or mix of the offer consideration for the Proposal.

CareTech also reserves the right to amend the terms of any offer for Cambian (including making the offer at a lower value or on less favourable terms):

a) with the recommendation or consent of the Cambian Board;

b) if Cambian announces, declares or pays any dividend or any other distribution to shareholders, in which case CareTech will have the right to make an equivalent reduction to the proposed consideration for the Proposal;

c) if a third party announces a firm intention to make an offer for Cambian pursuant to Rule 2.7 of the Code on less favourable terms than the Proposal; or

d) following the announcement by Cambian of a whitewash transaction pursuant to the Code.

Further terms of the Proposal

Any transaction implementing the Proposal would be subject to Cambian shareholders' acceptance or approval, as well as other customary conditions.

In addition, if the Proposal becomes or is declared unconditional the acquisition of Cambian by Caretech ("Potential Acquisition") would constitute a reverse takeover under the AIM Rules and require the publication of an Admission Document. Pursuant to the AIM Rules for Companies, completion of the Potential Acquisition would be conditional on, inter alia, receiving the approval of CareTech shareholders and admission of the enlarged share capital of CareTech to trading on AIM.

About CareTech

CareTech Holdings PLC is a leading provider of specialist social care services, supporting adults and children with a wide range of complex needs in more than 292 specialist services around the UK.

Committed to the highest standards of care and care governance, CareTech provides its innovative care pathways through five divisions covering adult learning disabilities, specialist services, young people residential services, foster care and learning services.

CareTech, which was founded in 1993, began trading on the AIM market of the London Stock Exchange in October 2005 under the ticker symbol CTH. Its property portfolio comprises more than 215 properties.

For further information, please visit: https://www.caretech-uk.com/

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Details of the offeree and offeror companies in respect of whose relevant securities Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make a Dealing Disclosure.

In accordance with Rule 26.1 of the Code, a copy of this announcement, the Richard Griffiths Irrevocable and the Lombard Odier Irrevocable will be available, subject to certain restrictions relating to persons resident in restricted jurisdictions, on CareTech's website at www.CareTech-uk.com/investors as soon as possible and, in any event, by no later than 12 noon on 25 July 2018.

The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Enquiries:

CareTech Holdings PLC

Tel: +44 (0)17 0760 1800

Farouq Sheikh, Executive Chairman

Michael Hill, Group Finance Director

Jefferies International Limited (Financial Adviser)Tel: +44 (0)20 7029 8000

Christopher Dickinson

Ashwin Pai

Tariq Hussain

Panmure Gordon (Nomad and Joint Broker)

Tel: +44 (0)20 7886 2500

Corporate Finance: Emma Earl, Freddy Crossley, Peter Steel

Corporate Broking: Charles Leigh-Pemberton

WH Ireland (Joint Broker)

Tel: +44 (0)20 7220 1666

Adrian Hadden

Chris Viggor

Buchanan (PR Adviser)

Tel: +44 (0)20 7466 5000

Mark Court

Sophie Wills

Tilly Abraham

Ashurst LLP are retained as legal advisers to CareTech.

Financial Adviser disclosure

Jefferies International Limited ("Jefferies") which is regulated in the United Kingdom by The Financial Conduct Authority, is acting as lead financial adviser exclusively for CareTech and no one else in connection with the matters set out in this announcement. In connection with such matters, Jefferies will not regard any other person as their client, nor and will not be responsible to anyone other person than CareTech for providing the protections afforded to clients of Jefferies or for providing advice in relation to the contents of this announcement or any other matter referred to herein. Neither Jefferies nor any of its subsidiaries, affiliates or branches owes or accepts any duty, liability or responsibility whatsoever (whether direct, indirect, consequential, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Jefferies in connection with this announcement, any statement contained herein or otherwise.

Panmure Gordon, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as Nomad and Joint Broker to CareTech and no-one else in connection with the matters set out in this announcement and will not be responsible to anyone other than CareTech for providing the protections afforded to clients of Panmure Gordon, nor for providing advice in relation to the matters set out in this announcement or any matters referred to in this announcement.

Cautionary note regarding forward-looking statements

This announcement may contain certain forward-looking statements, beliefs or opinions, with respect to the financial condition, results of operations, financial performance, business strategy or plans for future operations of Cambian and/or CareTech. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", or other words of similar meaning. These statements are based on assumptions and assessments made by CareTech in light of their experience and their perception of historical trends, current conditions, future developments and other factors they believe appropriate.

By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and you are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this announcement. CareTech does not assume any obligation to, and does not intend to, update or correct the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law. There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or disposals.

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Appendix 1

Irrevocable Undertakings

The following Cambian Shareholders have given irrevocable undertakings to support the Proposal by undertaking not to (amongst other things):

· sell, otherwise encumber or dispose of its shares other than pursuant to the Proposal; or

· solicit or encourage any other offer or scheme of arrangement or accept a competing offer or transaction that may frustrate the Proposal,

in relation to the following Cambian shares in which they are interested, representing in aggregate approximately 21.46 per cent. of the ordinary share capital of Cambian on the Last Practicable Date:

The Richard Griffiths Irrevocable will cease to be binding if:

(i) CareTech does not release an announcement of an offer for Cambian under Rule 2.7 of the Code (a "Rule 2.7 Announcement") on or before 5.00 p.m. on 13 August 2018 (or such later date as may be agreed between the parties) (the "Long Stop Date");

(ii) in accordance with the Code, a third party makes a general offer (howsoever structured) to acquire the whole of the issued and to be issued share capital of Cambian for a purchase price wholly in cash of more than 200 pence for each Cambian share; or

(iii) in accordance with the Code, a third party makes a general offer (howsoever structured) to acquire the whole of the issued and to be issued share capital of Cambian for a purchase price wholly in cash and the volume weighted average share price for CareTech for the 10 business days prior to the date of such third party offer (as reported on Bloomberg) is less than 373 pence per share.

The Lombard Odier Irrevocable will each cease to be binding if:

(i) CareTech does not release a Rule 2.7 Announcement on or before 5.00 p.m. on the Long Stop Date;

(ii) in accordance with the Code, a third party makes a general offer (howsoever structured) to acquire the whole of the issued and to be issued share capital of Cambian for a purchase price of more than 200 pence for each Cambian share;

(iii) in accordance with the Code, a third party makes a general offer (howsoever structured) to acquire the whole of the issued and to be issued share capital of Cambian and the volume weighted average share price for CareTech for the 10 business days prior to the date of such third party offer (as reported on Bloomberg) is less than 373 pence per share; or

(iv) CareTech fails to provide LOAME with a weekly confirmation that it is actively working towards the release of a Rule 2.7 Announcement by the Long Stop Date.

(1) Lombard Odier Asset Management (Europe) Limited acting in its capacity as discretionary investment manager or sub-adviser for and on behalf of certain funds and accounts managed by it and / or agent of Lombard Odier Asset Management (USA) Corp ("LOAM USA") acting in its capacity as discretionary investment manager for and on behalf of certain funds and accounts managed by it.

Appendix 2

Sources and bases of information

(1) Share prices and volume weighted average closing share prices for CareTech and Cambian are derived from data provided by S&P Capital IQ and refer to trading on the London Stock Exchange only.

(2) Issued share capital of Cambian of 184,198,746 ordinary shares of 1 pence each, as announced by Cambian on 10 July 2018.