July 20, 2012 / 6:49 AM / 6 years ago

UPDATE 3-Canadian pension fund Teachers' to buy UK's Goals Soccer

* Teachers’ to acquire Goals Soccer for about $115 million

* Deal comes about 3 months after Teachers’ initial offer

* Goals’ board to advise shareholders to back Teachers’ bid

By Euan Rocha

TORONTO, July 20 (Reuters) - Goals Soccer Centres Plc accepted a 73.1 million pound ($115 million) buyout offer from one of Canada’s biggest pension funds on Friday, setting the stage for a possible bidding war over the British operator of recreational-football centers.

The Ontario Teachers’ Pension Plan — better known simply as Teachers’ — said Goals’ board is unanimously recommending its all-cash offer to shareholders.

The agreement with Teachers’ comes roughly three months after the pension fund put forward a preliminary bid for Goals, which runs five-a-side football centers in the United Kingdom.

Teachers’ has agreed to pay 144 pence a share for Goals, a premium of 6.7 percent to Goals’ closing price on Thursday. The bid is 34 percent above Goals’ closing price of 107.5 pence on March 30, the last trading day before Teachers’ preliminary offer was made public.

However, a rival bidder, private equity firm Patron Capital, has already indicated that it may come in with a counter bid. That possibility pushed Goals’ shares above the Teachers’ offer price to 148 pence on the London Stock Exchange on Friday.

Goals said earlier this month that Patron, which owns five-a-side football company Powerleague, had expressed an interest in a takeover.

Patron said on Friday it was still considering its options and urged Goals’ shareholders not to take any action on the Teachers’ offer.

Teachers’, which is acquiring Goals through its private equity arm, Teachers’ Private Capital (TPC), said the deal requires, among other things, the backing of investors holding at least 75 percent of the company’s shares.

Goals’ independent directors, all of its executives and some of its largest shareholders, including Aviva Investors Global Services Ltd and Henderson Global Investors Ltd, have agreed to vote their shares in favor of the Teachers’ offer.

Peel Hunt analyst Paul Hickman said the Teachers’ offer “is a fair price for a quality leisure operation with significant prospects.”

In a note to clients, Hickman said the bid values Goals at 7.7 times its estimated 2013 earnings before interest, taxes, depreciation and amortization (EBITDA), which is higher than the multiple of 7.2 times EBITDA that Patron paid for Powerleague in 2009.

“We believe this is a good offer, although nothing will be lost by holding the shares in case of a counterbid,” he said.


Goals owns and operates 43 outdoor five-a-side football centers in the United Kingdom and one in the United States. Each center houses several pitches that are made of synthetic grass and are typically floodlit. The company has about 800 employees and reported revenue of about $47.8 million last year.

“We believe that this will be a win-win for investors, employees and the thousands of players who enjoy using Goals’ facilities,” TPC’s European head, Jo Taylor, said in a statement.

This is not Teachers’ first foray into the sports business. The fund has owned a significant stake in Maple Leaf Sports and Entertainment (MLSE) for nearly two decades. Maple Leaf boasts a prized collection of some of the most valuable sports franchises in Toronto, Canada’s largest city.

The fund agreed last December to sell its majority stake in MLSE to two of Canada’s largest telecom and media companies, Rogers Communications and BCE, in a deal worth C$1.32 billion ($1.31 billion). That deal will likely close later this year, after all regulatory approvals have been secured.

With roughly C$117 billion ($114 billion) in net assets, Teachers’ is the largest single-profession pension plan in Canada. It invests and administers the pensions of about 300,000 active and retired teachers in Ontario, Canada’s most populous province.

Its private equity arm, TPC manages a portfolio valued at about C$12 billion. Teachers’ private equity investments over the last two decades have achieved an average annualized return of close to 20 percent.

Teachers’ and Canadian peers such as Canada Pension Plan Investment Board (CPPIB), and Caisse de depot et placement have been among the world’s most active dealmakers in recent years, making major bets both in Canada and overseas. The investments have focused largely on real estate, natural resources and infrastructure projects.

“We are excited at the growth plans for the future,” said TPC’s Taylor. “Our aim is to cement Goals’ position as the UK’s premier five-a-side operator and help the business to achieve its full potential.”

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