M&A: Sun International acquires Peermont in a substantial deal

Lea Hogg December 18, 2023

South Africa’s Sun International has successfully concluded the acquisition of Peermont in a substantial ZAR7.3 billion deal. The agreement encompasses Peermont’s prominent properties, including the esteemed Emperors Palace resort and the digital betting platform PalaceBet.

Emperors Palace: A jewel in sun International’s crown

At the forefront of this acquisition is Emperors Palace, a premier casino resort in Gauteng, boasting 1,695 slot machines, 69 gaming tables, and 757 rooms. Sun International highlights the strategic value of Emperors Palace, citing its unique proximity to the OR Tambo International Airport as a compelling factor to attract high-net-worth customers.

Investor confidence and business growth

With 62.54 percent of shareholders rallying behind the move, Sun International considers the acquisition a “unique opportunity” to enhance its portfolio. The company sees Peermont as a “world-class and highly cash generative” addition that aligns with its strategic intent to focus on large urban casinos. The transaction is anticipated to elevate the quality of earnings and cash flow generation for Sun International.

Robust financial performance

The acquisition follows Sun International’s impressive H1 results, where income surged by 11.6 percent to ZAR5.78 billion, demonstrating remarkable growth despite economic challenges and heightened competition. The group’s adjusted EBITDA increased by 5.6 percent reaching ZAR1.57 billion, and overall profit saw a significant uptick of 41 percent from the previous year, reflecting the resilience and strength of Sun International’s operations.

Market resilience and share performance

Amid rumors in November, Sun International shares experienced fluctuations, emphasizing the market’s cautious anticipation. Following the official announcement of the Peermont acquisition, Sun International shares are currently trading at ZAR3,973, reaffirming investor confidence despite a minor 2.24% dip from today’s opening price.

In summary, Sun International’s strategic acquisition aligns with its overarching vision, leveraging the strength of Peermont and Emperors Palace to chart a dynamic course in the evolving landscape of gaming and hospitality.

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