Business

Sun International to buy Emperors Palace-owner Peermont 

Sun International, a leading South African gaming and entertainment group, announced the proposed acquisition of Peermont Holdings for R7.3 billion. 

The acquisition is expected to close by March 2024, Sun International said in an announcement on the stock exchange news service. 

Founded in 1995, the Peermont Group has a reputation for its expertise in the design, development, management, and operation of multifaceted integrated resorts. 

This includes hotels, casinos, convention centres, retail spaces, health spas, restaurants, bars, and diverse sports and entertainment facilities. 

The Peermont Group’s properties house an impressive number of gaming machines and hotel rooms, encompassing 3,349 slot machines, 152 gaming tables, and 1,636 rooms. 

Sun International will acquire Peermont’s entire portfolio of 11 properties, including the iconic Emperors Palace resort and PalaceBet. 

This flagship asset, located near the OR Tambo International Airport, attracts a high-net-worth clientele and boasts a robust business model. 

Emperors Palace significantly contributes to the overall value of the Peermont Group. 

Its performance is on par with the historical performance of Sun International’s top casino operations, boasting an average EBITDA margin of approximately 40% over the past four years (excluding 2020). 

Integrating Peermont’s diverse portfolio will enhance Sun International’s geographical reach and market share and present compelling opportunities for growth and synergy creation.

The strategic rationale for the acquisition is multifaceted:

  • Enhanced Scale and Market Share: The addition of Peermont’s properties solidifies Sun International’s position as a leading player in the South African gaming market.
  • Omnichannel Expansion: Leveraging Peermont’s infrastructure, Sun International can seamlessly expand its online gaming and sports betting reach, creating a unified and comprehensive customer experience.
  • Cost Optimisation and Synergies: Combining operations presents opportunities for streamlining processes, optimising resource allocation, and achieving substantial cost savings.
  • Enhanced Cash Flow and Value Creation: The combined entity is expected to generate robust cash flows, leading to improved profitability and enhanced shareholder value creation.

The acquisition is subject to regulatory approvals and conditions precedent, including shareholder approval for Sun International. 

The company said 62.54% of its shareholders have given written indications of support for the transaction. 

By leveraging Peermont’s strengths, Sun International stands to solidify its dominance in the South African casino, gaming and hotel market. 

The company said that the acquisition of Peermont will enhance the quality of its earnings and cash flow generation while also leveraging its existing online betting platform, SunBet, to grow PalaceBet. 

Sun International plans to fund the transaction entirely through debt, saying that its gearing will remain “comfortable”. 

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