South Africa-based casino operator Sun International has acquired fellow operator Peermont Group.
In addition, Sun International and Peermont have reached agreement to settle the objection by Peermont to Sun International’s Menlyn Maine project in Tshwane.
Peermont operates a portfolio of gaming and hospitality businesses in South Africa and Botswana, owning nine casino resorts, including its flagship Emperors Palace casino resort, three stand-alone hotels and one stand-alone casino. Peermont’s operations encompass a total of 3,374 slots, 156 table games and 1,711 rooms.
Sun International chief executive Graeme Stephens said: “Peermont has a number of complementary attributes that will enhance our group. These include the fact that Peermont has established and well-maintained assets and infrastructure, particularly Emperors Palace, which also has extensive hotel and conference facilities.
"Their portfolio also has high EBITDA margins in excess of 37 per cent and an experienced and highly regarded management team.”
The acquisition will be subject to approvals, including the relevant regulatory bodies and the approval of the requisite majority of Sun International shareholders. In this regard, the major shareholders have already been approached and have indicated their support for the transaction.
The acquisition provides Sun International with an opportunity to increase gaming revenue from Gauteng, which is the provincial jurisdiction with the highest gambling spend in South Africa. Emperors Palace is one of the largest casinos in South Africa with an attractive financial and operating profile.
As a result of the proposed transaction, Sun International’s portfolio of South African assets will be further diversified. This diversification has the effect of reducing Sun International’s reliance on its Grand West property in the Western Cape, which currently represents 27 per cent of the group’s EBITDA.
Peermont CEO Anthony Puttergill said: “The proposed transaction is a positive development for Peermont and supports the momentum that we have built during the past few years. We believe that a number of strong growth opportunities can be unlocked by being part of a larger and well-resourced group.”
