Private investors’ backing “turbo-charges” UK’s largest go-kart operator, generating gross returns of 4.1x money in four years.
- Connection Capital’s investment delivers 35% IRR on sale of TeamSport to Duke Street Capital
TeamSport, the UK’s largest indoor go-kart operator has seen its growth rapidly accelerate thanks to investment from clients of Connection Capital, the specialist private client investment business - generating returns of 4.1 times money in just over four years.
Connection Capital and the management team has just sold TeamSport to Duke Street Capital, having invested £2.8 million in its £7.73 million management buy-out (MBO) in February 2013.
TeamSport’s business combines enthusiasm with professionalism: it provides exciting karting experiences at high quality facilities with excellent customer service. It offers indoor tracks of up to 1km in length which include multi-level karting, banked corners, flyovers and ramps as well as hairpin bends, chicanes and fast straights. On-site restaurants and bars are also available at its venues.
TeamSport was established in 1992, but its growth has really taken off since the MBO, with a driven management team headed by CEO Dominic Gaynor, backed up with growth capital to fund its roll-out plans.
From nine sites at the time of the MBO, today it has 23 UK-wide, with a further three in the pipeline this year. Headquartered in Farnham, it now employs more than 750 staff, having tripled its headcount since Connection Capital’s investment.
Its ambitious expansion programme, together with enhanced operational leverage, has driven significant uplift in trading performance, with EBITDA growing from £1.6 million in 2013 to a forecast £5.6 million this year.
Under its new ownership, TeamSport plans to continue its UK growth, as well as investigating potential overseas expansion opportunities.
Bernard Dale, Private Equity Managing Partner at Connection Capital says, “TeamSport has been a tremendous investment for our clients, combining an exciting business with the potential for real, solid business growth.”
“The company has grown significantly through investing in its sites both new and existing, enhancing its customer offer through its dedicated staff, delivering excellent returns on capital invested in new and refurbished sites o consolidating its dominant market position as a national brand. We’re delighted to have been a part of that, and we wish Dominic and his team every success for the future.”
Dominic Gaynor, CEO of Teamsport says, “Connection Capital’s involvement has turbo-charged our business: from opening one or two sites a year we are now opening six. As well as rolling out new sites, the investment also enabled us to invest in our Head Office to support that growth.”
“In addition to their financial backing, they have also been willing to be patient and not look for short term gains as well as providing us with the benefit of their extensive experience. They really supported and believed in our business and have been as passionate as we are about what we could achieve.”
“Completing the buy-out with Connection Capital was a proud moment – getting the sense of external validation that someone else recognises the value in the business and endorses the strategy. Delivering that strategy ahead of time has given me immense satisfaction – and spurs me on. I’m very much looking forward to driving the next phase of the business with Duke Street Capital behind us.”
The shareholders of TeamSport were advised by GCA Altium (M&A) and Gateley plc (legal)