South African gaming and hospitality company Sun International has acquired Peermont Holdings Proprietary Limited, a hospitality and entertainment group that owns the Emperors Palace casino complex in Kempton Park, Johannesburg, and a slew of other smaller casinos across the country. The deal value is pegged at R7.3 billion ($398 million at current exchange rates).
Sun International said the deal represents a unique opportunity for it to acquire a group of gaming and hospitality assets of significant scale and quality, together with operating “one of the largest, most cash-generative, high-quality casinos” situated in a major metropolitan area.
Located close to the OR Tambo International Airport, Emperors Palace offers a gateway to high net-worth customers from the rest of Africa and abroad. Sun International said this customer base will drive opportunities for synergies with the rest of the group’s operations, including hotels and resorts, as well as the online sports and gaming business, creating large-scale benefits for the company.
The synergies also include extending Sun International’s SunBet management’s reach across the Peermont Group’s assets. In addition, extending the group’s omnichannel strategy across a scaled customer base is expected to unlock operating leverage across revenues, marketing reach, payment processing efficiencies, and game liquidity.
“Sun International has, over the last six years, repositioned itself from a highly geared hospitality and gaming group operating across several regions in Africa and Latin America, to a simplified and locally empowered South African-focused, cash-generative business with disciplined capital allocation principles. The group’s strong performance over the past two years has increased available capital for the group and put us in the enviable position of being able to consider value accretive acquisitions at an attractive point in the cycle,” Sun International Chief Executive Anthony Leeming, said.
“The addition of Peermont’s land-based casinos to our portfolio, underpinned by the flagship Emperors Palace Resort, will enhance the quality of earnings and cash flow generation of the group. This is consistent with the Group’s strategic intent to focus its portfolio on large urban casinos with the ability to drive value-enhancing strategies across smaller regional assets and online growth,” he added.
Founded in 1995, the Peermont Group’s physical properties house 3349 slot machines, 152 gaming tables and 1 636 hotel rooms in South Africa and Botswana.
“We will leverage off combined synergies to drive margin enhancement and capital efficiency. Importantly, we are in a position to conclude a transaction of scale, rapidly de-gear, and maintain a dividend pay-out as a result of the Group’s excellent recent performance and strong financial position thereby benefiting our locally empowered South African shareholder base,” said Leeming.
Original article: https://www.yogonet.com/international/noticias/2023/12/20/70150-sun-international-acquires-peermont-holdings-owner-of-emperors-palace-for-398-million
