Sun International Acquires Peermont Group for $400 M

On 14 December 2023, a leading casino and entertainment operator Sun International reportedly entered a deal to acquire casino and hotel group Peermont in South Africa for the purchase price consideration of around R7.3 billion (US$400 million).

Unique Growth Opportunity:

As reported by News24, Sun International considers the deal a unique growth opportunity. The acquisition of Peermont group will reportedly include the flagship Emperors Palace Resort being considered a “world-class and highly cash generative” business by the operator. Sun International is thus set to add the property to its enviable portfolio that includes the iconic Sun City casino and resort in South Africa.

The company will additionally expand its foothold in the regulated South African market through the integration of the eleven Peermont group’s properties developed across South Africa and Botswana since the group’s 1995 establishment. Sun International will use these to expand its land-based portfolio but will also benefit from the Peermont’s online sports and entertainment wagering site PalaceBet which will see the company’s online reach additionally extended, as News24 reports.

Emperors Palace Asset

At the same time, the value of Sun International is reportedly already estimated at almost R11 billion (US$600 million) on the JSE. The company operates four resorts and hotels, nine urban casinos, and the SunBet online operation in South Africa. The acquisition reportedly considers Emperors Palace the main asset for the buyer as this leading gaming destination in Gauteng includes four hotels and a wide range of leisure and entertainment amenities. The property is reportedly located in the vicinity of the OR Tambo International Airport to represent a travel convenience for high rollers from abroad.

According to the source, all these assets represent the opportunities for Sun International to use the group’s hotels, resorts, and the online sports and gaming business to generate large-scale revenues. The operator reportedly said that Peermont had also established 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.”

CEO Anthony Leeming reportedly stated: ‘’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.’’

As a consequence of the announced acquisition deal, shares of Sun International slightly rose in the morning of 18 December to aggregate a total growth of 13% in 2023.