London-based Patron Capital Partners has acquired a 29 percent stake in Powerleague Group, a commercial operator of five-a-side football centers in the UK.
The purchase, made for £23.1 million ($46.2 million), is intended to give Powerleague capital and real estate expertise to expand the business to continental Europe, as well as unlocking the value of the company’s current real estate portfolio, according to the firm. The investment was made from Patron’s third fund, a €893 million vehicle closed in March 2007.
Powerleague currently operates from 43 sites across the UK, with more than 120,000 customers each week using its 455 indoor and outdoor pitches. Powerleague recently acquired the JJB Soccer Domes business for £17.4 million, including the 22 pitch Old Trafford dome, the largest 5-a-side football center in the World. The business reported an EBITDA of £8.4 million on revenues of £23 million for the year ended 30 June 2007, a year on year EBITDA growth of 18 percent.
“It seems to use that the 5-a-side can be extended quite dramatically throughout Europe,” said Patron Capital managing director Keith Breslauer. “We can help support that push because we have 16 million square feet of space throughout Europe. They’ve been looking at it but haven’t been able to execute on it because they didn’t have partner like ourselves.”
The company was formed by 3i in 1999 from the merger of two companies it had acquired. In 2003 executives Claude Littner and Sean Tracey led a management buyout of the firm from 3i with the help of HBOS for an undisclosed price. Patron has acquired its shares from Littner and Tracey. The two are retaining a stake in the company with a combine 7 percent share.
Paul Orchard-Lisle and Keith Breslauer have joined the company as non-executive members of the board. Orchard-Lisle is currently the Chairman of Falcon Property Trust, a Director of Standard Life Property Income Trust, Director of Trinity Capital and the Chairman of the property arm of golf club operator Crown Golf.
Formed in 1999, Patron has approximately €1.6 billion of capital across several funds and related co-investments. Institutional investors in the firm’s property fund come from North America and Europe. The firm has offices in London, Barcelona, Milan, Luxembourg and Warsaw. Patron Capital III has the same acquisition strategy as the two previous funds, which delivered a weighted average investment performance of 64 percent internal rate of return. It is targeting undervalued businesses with underlying real estate value, properties encumbered by complex situations, properties deemed non-core by their parent company that are valued below intrinsic value and distressed properties.