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.
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."