Goals Soccer Centres bought by Soccerworld and private equity firm Inflexion after accounting fiasco
Five-a-side football operator Goals Soccer Centres has been acquired today by rival Soccerworld and private equity firm Inflexion.
Goals has been hit by an accounting scandal after its auditor BDO discovered it had mis-declared VAT amounting to at least £13.2m.
The company delisted its shares from Aim in August after it declared it was unable to file accounts.
Inflexion and Soccerworld have agreed to acquire Goals through a new vehicle Northwind 5s Limited.
The deal will take place through a pre-pack administration with Deloitte appointed as administrator.
The price paid for Goals is understood to be around £27m.
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The price of the deal was not disclosed, but Goals said: “It is very unlikely that shareholders of Goals will receive any value for their shares.”
Goals said it wanted to “give a full account” of the demise of the company “given unsubstantiated comments made in the media by certain parties”.
It said the VAT issues were first picked up by BDO in its first audit of the company in February after the board decided to replace KPMG which had audited the company for 15 years.
Goals said it engaged accountancy firm RSM and an independent tax expert to review the firm’s books for the last four years after BDO reported its concerns.
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The pair said they thought the VAT misdeclaration amounted to £13.2m, plus interest and “any penalties HMRC deemed appropriate”.
Goals said its adviser had more recently said that HMRC may be able to extend the window of a VAT investigation beyond four years meaning the amount owing could be “very significantly more” than £13.2m.
A separate team of auditors from BDO identified “some very serious issues dating back to 2009”.
These included the apparent creation of false fixed assets, false revenues and fake invoices.
BDO also identified the wrongful payment of cheques to “individuals associated with the company” in 2014.
Read more: Sports Direct says ‘skulduggery’ wiped out shareholders at Goals Soccer Centres
Goals said it believes the profits of the business may have been overstated by as much as £40m since 2009.
The company said its advisers’ reports “have recently been handed over in full to the relevant regulatory authorities and law enforcement agencies”.
Goals owes its bank the Royal Bank of Scotland approximately £30m.
Goals said it chose to delist as closing its 2018 books “has been complicated by the fact that no historic profit and loss account and balance sheet numbers can be trusted”.
The company said it received a “preliminary, but highly caveated offer, for the shares of the company from Sports Direct International”.
Goals said it “co-operated fully with Sports Direct International Plc and provided them, on a timely basis, with access to the board members, key personnel, the bank, all financial information (including financial projections) and other relevant information to permit them to formulate an offer”.
Goals said it has “already taken steps to preserve the company’s legal rights to compensation from parties who might be liable through negligence or more direct involvement”.
It has entered standstill agreements with former directors and also with its former auditors KPMG.