Five-a-side football operator Goals Soccer Centres today confirmed it was in early-stage talks over a possible merger with rival Powerleague.
The announcement came after a weekend report by Sky News that the two companies had been discussing a combination to create a business with about 100 sites across the UK.
There is no certainty that any transaction will proceedGoals Soccer Centres
• READ MORE: Goals eyes ‘dozens’ of US sites as sales accelerate
Paisley-based Powerleague, owned by private equity firm Patron Capital, considered a possible approach for Aim-quoted Goals in 2012, but a formal offer was not forthcoming. Goals went on to agree a £73.1 million takeover bid from Ontario Teachers’ Pension Plan, but that deal collapsed despite the backing of management.
This morning, East Kilbride-based goals said: “The preliminary discussions with Powerleague are but one of the strategic opportunities currently being assessed by the Goals board.
“Furthermore, at this stage, no commercial or financial terms have been agreed and no decision on any course of action has been made by the board. There is therefore no certainty that any transaction will proceed.”
• READ MORE: Powerleague expands in Netherlands with 50th centre
Sahill Shan, an analyst at N+1 Singer, said that while the deal makes “huge sense”, it could fall foul of competition law.
He said: “Strategically and financially a tie-up would make huge sense given how competitive the five-a-side football sector has become with the resurgence of the local authority sector.
“The main risk we envisage is whether any tie-up would trigger any competition issues and how these might be addressed.”
Last month, the new chief executive of Goals told The Scotsman that he was hopeful the company could have “dozens” of sites across the US after seeing it move back into the black.
Mark Jones, the former Grosvenor Casinos managing director, said the group was focusing its expansion efforts on Los Angeles, where it currently has two centres.
His comments came as Goals, which has 46 centres across the UK, returned to sales growth in 2016, with takings up 1.6 per cent on a year earlier to £33.5m. That helped the firm move back into the black with a statutory pre-tax profit of £3.7m, compared with a loss of £6.2m a year earlier.
Powerleague, founded in Paisley 30 years ago, was acquired by Patron in a £42.5m deal in 2009, and last year said it was eyeing further expansion in Europe after launching its 50th centre.