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Sanlam Private Equity Announces Acquisition of Controlling Interest in Q LINK

Sanlam Private Equity (SPE) announced that it had acquired a controlling interest in payment solutions provider Q LINK Holdings (Pty) Ltd. Q LINK provides payment application software that manages deductions in both the payroll and bank collection streams.

The Emolument Attachment Order solution has saved South African public sector employees more than R300 million in invalid and over-deductions from court orders since 2014.

The deal is expected to grow direct jobs by around 28% over the next few years, driving SPE’s commitment to economic recovery and growth.

SPE made the acquisition through its new third-party private equity fund, SPE Mid-Market Fund (the Fund), one of three impact-focused funds in the Sanlam Investor Legacy Range launched in 2020 to create and preserve 27,000 jobs while still delivering value for investors. The Q LINK acquisition follows that of Cavalier Group and Absolute Pets from the Fund.

Q LINK is a preferred provider of payment application software to the South African insurance industry and other third-party benefit providers. It improves collection success rates while optimising costs. The concept of “affordability and control” ensures that only valid and affordable deductions are processed through employee payrolls. Currently, the company facilitates collections for over 30% of all recurring retail life insurance premiums in the country.

SPE agreed to acquire the shares from Apis Partners, a UK-based private equity fund; Multiply Group, a local private investment firm, and other minority shareholders.

SPE Managing Partner, Paul Moeketsi, says his team has long monitored the financial technology sector. “We are seeing the significant social impact, especially around financial inclusion and improving the lives of previously disadvantaged communities through the provision of financial access and high growth and good return prospects from this sector. We are therefore very excited to acquire Q LINK as our first investment in the space.”

He said Q LINK has a robust business model and has been the preferred payment collections partner for many insurance companies for over 20 years. The company services over 4.5 million employees, collecting R4.5 billion in monthly premiums for over 133 clients, many in the insurance industry. “Together with the management team, we will identify and unlock new growth opportunities while providing access to our capital, commercial expertise in investing and attractive black economic empowerment credentials.”

Moeketsi says the Fund’s key focus areas are jobs and social impact, and Q LINK is a strong strategic fit. “Q LINK currently has 179 highly-skilled and specialised employees, 57% of whom are female and 45% from historically disadvantaged backgrounds.

“Overall, youth accounts for 39% of employees and, over the investment period, Q LINK intends to grow direct jobs by 28%. This will be done through the rollout of the new Moneyhub service, a consolidated collection and disbursement platform, integrating payroll, debit order and early debit order (EDO) deductions in line with the new mandate authentication process, DebiCheck,” said Moeketsi.

In addition, according to the National Treasury domestic output multiplier for finance and business services sectors and the company’s projected revenues, Q LINK is expected to contribute an additional 757 indirect jobs within the wider economy.

Q LINK Founder and current Chairman, Henry Smith, says, “We are looking forward to working with a new strategic partner in SPE as we enter the next growth phase of our business. In addition, we are delighted to align with a commercial investor who understands the importance of Q LINK’s continued independence as a strategic payment collections partner for several insurance companies in South Africa.”

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