South African casino and hotel operator Sun International has boosted its Latin American presence by acquiring four gaming operations in Peru.
On Friday, Sun International announced that it had entered into a share purchase agreement with Thunderbird Resorts and Casinos Peruanos to acquire the Peruvian companies behind four gaming operations, including the Fiesta Casino in Peru’s capital Lima.
The deal, which is worth R352.8m (US $26.5m), is expected to close by January 31, 2018, subject to securing the necessary regulatory approvals. The deal price includes $10m for the immovable property on which the Fiesta Casino sits. Sun Int’l says it will finance the deal from its current cash reserves.
The book value of the targeted gaming operations as of June 30 was approximately $9.1m. In the six months ending June 30, these operations generated after-tax profits of $768k (including finance charges of $289k) on earnings of $4.2m.
The deal will be handled through Sun Int’l’s majority-controlled subsidiary Sun Dreams, which already handles gaming, hotel and restaurant operations in Peru, Chile, Colombia and Panama.
Former Sun Int’l CEO Graeme Stephen confirmed his company’s interest in further Latin American expansion last November. Anthony Leeming, who assumed the CEO role in February, stated just last week that the company remained on the hunt for potential acquisitions in Latin America.
Sun’s Latin American operations played a dual role in the company’s recent H1 earnings report, which showed rising debt due to expansion and upgrades to local venues, but revenue was up 19% year-on-year thanks in part to its enlarged Latin American footprint.