Goals and Powerleague confirm five-a-side merger talks

(c) Sky News 2017: <a href="http://news.sky.com/story/goals-and-powerlague-confirm-five-a-side-merger-talks-10849493">Goals and Powerleague confirm five-a-side merger talks</a>
 

Five-a-side football business Goals Soccer Centre has confirmed it is in preliminary talks with rival Powerleague over a possible merger that could create a major international leisure player.

The announcement comes after the talks were first reported by Sky News over the weekend. Shares (Berlin: DI6.BE - news) in UK-listed Goals rose 5%.

It said the potential tie-up was just one of a number of "strategic opportunities" being weighed up by the company's board, and that no commercial or financial terms had been agreed.

A merger between Goals and Powerleague, which between them operate roughly 100 sites, would significantly increase their UK presence, as well as bringing their venues in Ireland (Other OTC: IRLD - news) , the Netherlands and the US under one corporate umbrella.

Goals, which was loss-making in 2015, returned to profit last year, and appointed Mark Jones, a former Grosvenor Casinos executive, as its new boss.

It also raised nearly £17m from investors to pay down debt.

The company had a market capitalisation of just under £77m before details of talks surfaced.

Powerleague trades from more than 750 football pitches, and also owns Powerplay, a league operator across 240 UK venues.

In addition to football, it has a multi-sport offering including basketball, dodgeball and netball.

The company was bought by Patron Capital Partners, which focuses on buying businesses with substantial real estate assets, in 2009 in a deal which put an enterprise value on Powerleague of about £80m.

Previously listed on the London stock market, Powerleague has been expected to be put up for sale by Patron for some time.

Sahill Shan, 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."

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