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Sasfin Bank’s Start-to-Finish Import Solution

2012-08-30

Some businesses are just made to be together. Sasfin Group’s recent tie up with AltX-listed financial business solutions provider, IQuad Group Limited, is one such example of where powerful inter-business synergies can be extracted for the benefit of the newly combined company - if the right fit is achieved.

In this instance, it’s created the opportunity to allow Sasfin to offer a “Start-to-Finish” business solutions to its clients requiring a range of business services from trade finance, freight forwarding and clearing; transportation; banking and credit facilities, debtor finance; foreign exchange risk management, insurance services and even maximizing their rebate claims from the incentives offered under Government’s DTI Enterprise Investment Programme (EIP) – all at a one-stop shop.

It all began earlier last year when Sasfin entered into discussions with PSG Group, which, through its subsidiary Paladin Capital, owned the majority of the issued share capital in AltX-listed IQuad, along with Thembeka Capital, to acquire the majority of IQuad’s issued share capital.

The deal was struck with Sasfin Holdings Limited in August last year and the businesses were formerly merged shortly thereafter.

IQuad’s CEO, Dave Edwards, who was party to the original merger discussions, recalls that there was an instant meeting of minds about what the benefits would be of combining both businesses under one roof.

“Both parties could immediately see the synergies that could be extracted by bringing the two companies together and the whole deal was concluded in a matter of weeks,” he says.

Edwards says IQuad, with its expertise in obtaining benefits and refunds under government and the DTI’s incentive programme, coupled with its global trade services providing import and export business solutions, including customs rebate administration and interest rate and foreign exchange risk management, dovetailed phenomenally well with Sasfin’s import and export finance offerings, asset finance facilities, foreign exchange dealing and short term insurance and logistics capabilities.

“The more closely we looked at a possible tie up between the two businesses, the more synergies we could see. There is no doubt that there is a huge amount of synergy across many facets of our businesses,” he notes.

“For example, a lot of the clients we advise on DTI incentive grants need asset finance which Sasfin Bank can provide. In addition, a lot of our clients need to be able to execute foreign exchange transactions. Sasfin bank has a foreign exchange licence and is able to do this for them – although as an advisor on foreign exchange transactions we are always obliged to act in our individual client’s best interest.

“There are also ample opportunities for us to introduce to our clients Sasfin’s clearing and forwarding capabilities through the activities of Sasfin’s freight forwarding and customs clearing subsidiary, Premier Freight, and its short term insurance solutions via Sasfin Insurance Brokers.”

By the same token there is obviously plenty of opportunity for deals to flow in the opposite direction too – from Sasfin’s activities back to IQuad – especially through Sasfin’s provision of import and export finance, freight logistics and insurance to its clients.

“What’s really exciting about this deal,” says Edwards, “is that it puts us in the position to be able to band together and offer our clients a cluster of services that none of our competitors are able to match. It’s what we call our “Start-to-Finish” business solution.”

Interestingly, the business synergies are not the only compatibilities between the two groups. There is also an extremely close cultural fit and business ethos that runs through the two groups.

“Both Sasfin and IQuad are very client-centric businesses which built their strong brands by creating partnerships with their clients and working extremely closely with them, he notes.

“For example, one of Sasfin’s major slogans is ‘a partner beyond expectations’ while IQuad’s pay off line is ‘creating mutual value’ and being your ‘preferred partner.’

“By concluding this transaction we have found a partner that really understands the market that small entrepreneurs operate in. A lot of what both of us do in our daily activities is helping our clients grow to the next level. By combining our services we will now be able to offer them a lot more solutions from one central source.”

Edwards observes that originally it was important for IQuad’s credibility to be able to be associated with a “Big brother” of the stature of the PSG Group. The same, he says, holds true for its tie up with Sasfin today.

“What better credibility can there be than to be part of a listed company that is also a bank?” he asks.

The range of Services now offered by the combined Sasfin and IQuad Groups:

  • Trade Finance Solutions - which include banking, capital and credit provision; insurance, shipping and clearing
  • Debtor Finance Solutions up to 80% of invoice value
  • Commercial Solutions which assist clients in accessing lucrative government incentives for manufacturers who incur capital expenditure in the case of new start-up operations or plant expansions
  • Foreign Exchange Risk Management Solutions  including quantifying risk, developing suitable hedging strategies, execution and administration support
  • Foreign exchange execution through Sasfin’s international treasury.