Empowerment investment holding company African Rainbow Capital (ARC) on Wednesday announced plans to acquire a majority shareholding in independent actuarial advisory business QED for an undisclosed amount.
QED operates across 17 countries in Africa, offering actuarial and risk management solutions to insurers, healthcare providers, pension funds, banks, regulatory and industry bodies, retailers and developmental organisations.
It employs 56 people, including 18 qualified actuaries. QED is expected to grow its staff complement following the acquisition.
The transaction is being done through ARC Financial Services, in which ARC Investments holds a 49.9% interest.
The transaction creates growth opportunities for both parties and elevates QED to the status of the largest majority black-owned actuarial firm in both South Africa and the rest of Africa, said ARC.
QED’s “attractive empowerment status” will bolster its growth ambitions and its partnership with ARC could fund future acquisitions, noted QED CEO Craig Falconer.
“We have followed closely the development of ARC over the last three years and we are excited to enter into this partnership,” he commented, adding that ARC’s “solid, broad-based empowerment credentials, combined with its financial strength” were the key offerings to QED.
Further, he noted that QED could leverage ARC’s strong balance sheet to fund QED’s future growth opportunities. “Significant opportunities exist, in South Africa and elsewhere on the continent, to acquire strategically relevant businesses to both expand and deepen our footprint on the continent.”
The acquisition is very much in line with ARC’s strategic focus, said ARC co-CEO Johan van Zyl.
“A key element of our investment strategy is to build a portfolio of financial services investments, whereby we leverage our existing investments and relationships to diversify our investment holdings and thereby create value for shareholders.”
He stated ARC’s belief that QED would add “significant value” to existing companies in the ARC Investments portfolio, as well as to clients outside of the portfolio, adding that management was driving synergistic opportunities between portfolio companies to unlock opportunities.
Falconer added that, while Africa remained QED’s immediate focus, the transaction enabled the longer-term opportunity to look at acquisitions beyond the continent.
Van Zyl noted that, per ARC’s philosophy, it would not assume operational control of QED, despite acquiring a majority shareholding, but would rather appoint two representatives to the QED board.
QED affirmed that its management would continue to drive the implementation of its strategy and related operational responsibilities.