HOSPITALITY concern, Rainbow Tourism Group (RTG), says the acquisition of Montclair Hotel and Casino will strengthen its balance sheet by US$5,39 million.
RTG revealed on November 22 that it had signed a sale and purchase agreement for the acquisition of the entire issued ordinary shares of Briolette Services (Private) Limited trading as Montclair.
In a statement last Friday, RTG revealed that post-acquisition, the hospitality group’s total assets would rise to US$60,27 million from a pre-purchase value of US$54,88 million.
RTG said the acquisition was part of its five-year strategy and growth objectives which will enable the group to “enhance its footprint in the Eastern Highlands, a key tourism and business destination in Zimbabwe”.
“This investment is supported by a robust business case, with clear potential for revenue growth through increased market penetration and the expansion of conferencing and hospitality offerings. By leveraging Montclair’s prime location, RTG will strengthen its competitive position, capitalise on rising demand in the region and drive long-term value creation,” RTG said.
The assets involved in the transaction include the business of Montclair as a going concern with all its related assets, with the hotel's room capacity being 85.
The deal also involves a portion of land surrounding the hotel comprising approximately 24 hectares (ha), which will be subject to the subdivision of the 87,2265ha.
RTG will take ownership of approximately 24ha, leaving the balance in the hands of the current shareholders.
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The transaction also includes the lease agreement relating to the Claremont Golf Course as well as buildings.
These buildings include the main hotel building, the casino buildings, staff housing (south and north section), Rayton Apartments in Nyanga township and all other hotel-related amenities.
RTG said Montclair would also benefit significantly from the synergies created by becoming part of the hospitality group. “Leveraging RTG’s well-established brand equity, the hotel will deliver a seamless, high-quality experience to clients across the group’s portfolio of resorts and business facilities. This consistency will help strengthen customer loyalty and attract new clientele, enhancing Montclair’s competitive edge in the market,” RTG said.
“Additionally, the group’s robust marketing and distribution network will further elevate Montclair’s visibility, driving increased occupancy and revenue. Moreover, Montclair will gain access to RTG’s operational expertise, achieving significant economies of scale in key business functions.”
Following the purchase, procurement processes will be streamlined, allowing Montclair to benefit from centralised purchasing power, which will reduce costs for essential goods and services.
“Administrative efficiencies will be realised through shared back-office functions such as finance, IT and legal services, enabling Montclair to focus on core operations,” RTG said.
“In human capital management, RTG’s centralised training programmes and talent development initiatives will enhance staff expertise, ensuring a consistently high standard of service across all departments.”
RTG said these synergies would position Montclair as a more efficient and competitive operation, contributing to sustainable profitability and long-term value creation to RTG shareholders.
The acquisition of Montclair includes debt worth US$392 951, which represents its trade and other payables, amounts it owes to its suppliers and other parties for goods and services it has received but not yet paid for.
