Duke Street speeds ahead with go-karting company acquisition

Duke Street, a mid-market private equity group, has acquired 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 2017, with backing from Goldman Sachs Asset Management as a step in the evolution of Duke Street’s deal-by-deal approach into a hybrid funding model.

Commenting on the TeamSport investment, Charlie Troup, Duke Street’s 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 [the] team for the next phase of growth.”

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 UK go-karting sector is highly fragmented, comprising more than 200 mainly independent, single-site operators. TeamSport’s next largest competitor has four sites, with the company achieving growth in recent years through a combination of like-for-like sales improvement, new site openings and enhanced performance from acquired tracks.

TeamSport 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.

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 offering is capable of being taken to the next level to extend TeamSport’s leading market position and accelerate its growth.”

Dominic Gaynor also commented: “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 per cent IRR for its investors.

Unigestion acted as the sole institutional co-investor in the deal. The price has not been disclosed.