Duke Street acquired a controlling stake in UK-based TeamSport Karting, an indoor go-karting operator. No financial terms were disclosed.
Duke Street, the mid-market private equity group, has acquired a controlling interest in TeamSport Karting, the UK’s largest indoor go-karting operator. The investment is the first for Duke Street’s new Cornerstone Fund, established in January this year with backing from Goldman Sachs Asset Management as a key step in the evolution of Duke Street’s deal-by-deal approach into a hybrid funding model. Unigestion acted as the sole institutional co-investor in the deal.
TeamSport was established in 1992 and completed a management buyout from its founder in 2013, backed by investor Connection Capital. With just eight tracks in 2013, TeamSport, led by managing director Dominic Gaynor, now operates 23 tracks across the UK, including five in London, and expects to accelerate this rate of growth under Duke Street’s ownership. The price has not been disclosed.
The UK go-karting sector is highly fragmented, comprising more than 200 mainly independent, single-site operators. TeamSport’s next largest competitor has four sites. The company has achieved impressive growth in recent years through a combination of like-for-like sales improvement, new site openings and enhanced performance from acquired tracks.
TeamSport’s business combines enthusiasm with professionalism, providing 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.
Commenting on the TeamSport investment, Charlie Troup, Duke Street Managing Partner, said:
“TeamSport presents an exciting opportunity to support the clear leader in a growing niche segment of the UK leisure market. The strong management team has built a compelling proposition for all levels of racegoers and an excellent platform for further development. We are delighted to be backing Dominic and his team for the next phase of growth.”
Duke Street Partner Jason Lawford added:
“The company’s focus on a superior customer experience, delivered by its committed and loyal team, is recognised in industry-leading customer service scores. We are confident that TeamSport’s high quality offering is capable of being taken to the next level to extend TeamSport’s leading market position and accelerate its growth.”
Dominic Gaynor said:
“Duke Street stood out from the pack with their understanding of our business and their determination to deliver – in my view this makes them an ideal partner for the next stage of TeamSport’s journey.”
Duke Street’s ten year track record has produced 2.3 times cash-on-cash returns and 29% IRR for its investors.
About Duke Street
Duke Street is a leading operationally focused European mid-market buyout group. Founded in 1988, it invests across four sectors: healthcare, services, consumer and industrials. Duke Street has a proven model of value creation by successfully transforming businesses through implementing operational change and buy-and-build, having made approximately 60 bolt-on acquisitions for its portfolio companies. The firm is supported by its strategic partner and shareholder, Tikehau Capital, an asset management and investment group investing across private debt, real-estate, private equity and liquid strategies, with €11.1bn of assets under management and €2.3bn of shareholders’ equity.
Duke Street adopted a deal-by-deal funding model in 2012, leading co-investment in six transactions with a combined enterprise value of approximately £800m. Two realisations so far from this model have delivered a combined return of more than 3x.