Powerleague continues Scottish market exodus with £42.5m deal

Published on Friday 2 October 2009 21:33

POWERLEAGUE, the five-a-side football company, became the latest Scottish company to quit the stock market yesterday when it was sold to a private equity firm in a £42.5 million deal.

It becomes the 20th Scottish firm to leave the London Stock Exchange in the past two years – a rate of almost one de-listing a month.

Keith Breslauer, managing director of private equity firm Patron Capital, which funded the deal, said the group's future was "best suited away from the public markets".

Analysts said expansion plans had been hampered by a 36.4m debt. Although the buyout was not backed by debt finance, the group's loan facility – formerly held by HBOS – is now underwritten by HSBC and Lloyds Banking Group. HBOS backed executive chairman Claude Littner's management buyout of the group from 3i Group in 2003.

Yesterday Littner admitted the group had "paused for breath" this year after the 17.6m acquisition of Soccer Domes from JJB sports in 2008, which included the 22-pitch Old Trafford dome in Manchester.

In a statement to the stock exchange, Patron said de-listing would allow Powerleague to "access a wider range of funding options" than are currently available to Powerleague as a public company, and said constrained debt markets were "limiting growth prospects".

In April Breslauer signalled a "dramatic" expansion in Europe for the group where Patron says it has "16 million square feet of land".

Bryan Johnston of investment management firm Brewin Dolphin said the loss of Scottish companies from the stock market over the past two years was the result of "the dynamics of a bear market" and predicted that, eventually, more would return.

Patron Sport Leisure, a Luxembourg incorporated company owned by Patron Capital, took a 29 per cent stake in the group in March, sparking rumours Patron would make a bid.

Powerleague founder Sean Tracey retains a 2.6 per cent stake. Finance director Sheena Beckwith will also remain and has a 0.24 per cent stake.

Patron paid 29m – at 52p a share – while Tracey and Beckwith contributed a further 1.2m. The group said the offer was a "significant" premium of 40.5 per cent on the value of the shares of 39p in April when negotiations between Patron and Powerleague started.

The group revealed full-year results to 4 July. Revenues increased by 17 per cent to 30.9m. Pre-tax profits of 3.7m were down from 5m although operating profit before exceptionals was up 10 per cent to 7.5m.