The owner of the Wagamama restaurant chain is preparing to swallow Britain's biggest operator of go-kart tracks, even as concerns about the consumer spending outlook dampen investors' enthusiasm for leisure and retail industry deals.
Sky News understands that Duke Street Capital, a private equity firm, has secured a deal to acquire Teamsport, which operates more than 20 sites across the UK.
The deal, which could be announced as soon as Thursday, will be significant for Duke Street as it will be the first struck by a new fund which has the backing of Goldman Sachs (NYSE: GS-PB - news) , the Wall Street investment bank.
Sources said that Duke Street, which is sitting on a potentially lucrative return from the eventual sale of Wagamama, is expected to pay in excess of £40m for Teamsport.
The go-karting business has been part-owned by Connection Capital, another investment firm, since 2013, when it changed hands in a £9m management buyout led by Neil Taylor, the co-founder of high street retailer Game Group.
Duke Street is one of the UK's best-known private equity investors, having backed companies including The Original Factory Shop, Payzone (Stuttgart: 3444956.SG - news) and Voyage Care, a care provider for people with learning disabilities.
The firm has generated favourable returns for investors over the last decade.
The investment in Teamsport comes as a number of auction processes for consumer-facing businesses, including the retailers Dreams and Aurum Holdings, encounter difficulties amid uncertainty about the economic outlook.
Sources said Duke Street was confident about the prospects for Teamsport under its ownership.
GCA Altium, the investment bank, has been advising Teamsport on the deal.
Duke Street and GCA Altium declined to comment.