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- Sun International has agreed to buy the Peermont Group, looking to build scale and help build its online offering.
- The acquisition, which values the enterprise at R7.3 billion, brings 11 properties and online betting platform PalaceBet.
- Sun International says the acquisition of Emperors Palace in Gauteng is part of its strategic focus on large urban casinos.
- For more financial news, go to the News24 Business front page.
Sun City-owner Sun International said on Monday it has reached a deal to acquire casino and hotel group Peermont which values that company at about R7.3 billion.
It said the acquisition of Peermont, which owns Emperors Palace Resort, was a "unique opportunity" to build scale and acquire a "world-class and highly cash generative" business.
The Peermont group, which was established in 1995, operates 11 properties across SA and Botswana, as well as the online sports and entertainment betting site PalaceBet.
Sun International, valued at almost R11 billion on the JSE, operates four resorts and hotels in SA: the Maslow in Sandton, the Wild Coast Sun in the Eastern Cape, the Table Bay Hotel, and Sun City in the North West. It also operates nine urban casinos, with at least one in every province except Mpumalanga, with these including Carnival City in Gauteng and the Western Cape's GrandWest. It also has an online offering, SunBet.
Emperors Palace makes up a significant portion of the entire Peermont portfolio and is a leading gaming destination in Gauteng, complemented by four hotels, a health and beauty spar, as well as dining and entertainment and a cinema.
Sun said the proximity of Emperors Palace to the OR Tambo International Airport offers a gateway to high net-worth customers from the rest of Africa and abroad.
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, it said.
Peermont had also developed an "excellent track record in the design, development, management, ownership and operation of multifaceted integrated resorts, including hotels, casinos, convention centres, retail centres, health spars, restaurants, bars and other sport and entertainment facilities", it added.
"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," CEO Anthony Leeming said in a statement.
"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 said.
Breaking down the purchase price, Sun International said this would be determined with reference to an enterprise value of R7.3 billion, though there are conditions, including profit expectations of the business. Sun International will also assume debt that stood at R4 billion at the end of June, which would increase its SA debt levels to over R13 billion.
Shares of Sun International had risen marginally in morning trade on Monday and have gained about 13% in the past year.
