Sun International, a company based in South Africa, has made a major acquisition by purchasing Peermont, a company that includes the popular Emperors Palace resort and online brand PalaceBet. The deal, which was announced on Monday, is valued at ZAR7.3bn (£313m/€363.2m/$396.6m). Sun International described the acquisition as a “unique opportunity”, as they will be acquiring a “world-class and highly cash generative” company.

With the purchase, Sun International will gain control of Peermont’s 11 properties across South Africa and Botswana, as well as the PalaceBet online sports betting site. Emperors Palace, located in Gauteng, features 1,695 slot machines, 69 gaming tables, and 757 rooms. Sun International sees the resort’s proximity to the OR Tambo International Airport as an opportunity to attract “high net-worth customers”.

The move to acquire Peermont was supported by the majority of Sun International’s investors, with 62.54% of shareholders lending their written support for the purchase. Sun International believes that the transaction will improve the company’s earnings and cash flow generation.

This acquisition follows a strong first half of the year for Sun International, with income rising 11.6% to ZAR5.78bn (£243.7m/€284.5m/$305.3m) for the six months until 30 June. The group’s adjusted EBITDA for the period was ZAR1.57bn, a 5.6% increase from the previous year, and overall profit was ZAR485m, up by 41.0%. This growth came despite a challenging economic climate and increased competition.

Urban casino income also saw a 4.2% increase to ZAR3.27bn, with casinos contributing 91.8% of this total. Sun International’s acquisition of Peermont is in line with its strategic intent to focus its portfolio on large urban casinos.

Sun International had hinted at this move in late November, when they disclosed that discussions were taking place regarding a potential acquisition. At the time, the identity of the party was not revealed, and shareholders were advised to exercise caution when trading in the company’s securities until further details were announced.

Following the acquisition talks, Sun International’s shares initially dropped before rebounding. They are currently trading at ZAR3,973 (£170/€197/$215) per share, which represents a 2.24% decrease from the day’s opening price.

By admin