Why ControlScan Sold Itself in Separate Deals To PDI And Sysnet

ControlScan Inc., a major provider of PCI compliance and security services, has sold its business in two separate deals to Professional Datasolutions Inc. and Sysnet Global Solutions, respectively. PDI has purchased ControlScan’s Managed Security Services unit and Sysnet has acquired the company’s Managed Compliance Services Unit. 

Sysnet also acquired the ControlScan brand, which will be absorbed into the Sysnet brand over the next year, effectively ending Atlanta-based ControlScan’s existence after 15 years in business. Terms of the deals were not disclosed.

ControlScan’s decision to sell was driven largely by its private-equity partner, St. Louis-based Thompson Street Capital Partners. ControlScan had been actively shopping its business, the company says. “We were seeking the next stage of growth for our investors, as well as looking for ways to better serve our customers with a broad portfolio of solution offerings,” a ControlScan spokesperson says by email.

PDI, a software developer and service provider for convenience stores and petroleum wholesale marketers, services many of the same customers as ControlScan. PDI says the acquisition of ControlScan’s Managed Security Services unit, which was finalized last week, will enable PDI to bolster customer relationships by delivering security solutions that protect data, applications, and systems through a single provider. 

“Since security is a focus for our customers, it’s a priority for us,” Chris Berry, chief technology officer for PDI says by email. “We are adding security solutions to our portfolio of offerings to support our customers’ needs better now and into the future. We believe that ControlScan MSS’s solutions and team fit well into the PDI culture and can help us achieve these goals.”

ControlScan’s Managed Security Services unit is expected to complement PDI’s business by enabling it to offer a cloud-based security platform and services to help address customer needs, Berry says. The acquisition also supports PDI’s strategy of global expansion through additional customer services and support.

This is not PDI’s first payments-related acquisition. Earlier this year, the company purchased ZipLine, a provider of private-label debit payment services for convenience stores.

Sysnet’s ControlScan acquisition, which the company announced earlier this month, will bring Sysnet’s customer base to nearly 4 million small and mid-size businesses and payment processors worldwide. Sysnet also says the acquisition will also give it more resources to deliver more innovative products through its platforms.

“As a single, leading organization, our focus will continue to be on improving merchants’ security status as we help them get compliant,” the company says by email. “Likewise, we are committed to working one-on-one with our partners to ensure that their business/program goals continue to be met and that their merchants continue to receive top-rate service. We will do this through strong, transparent communication every step of the way.”

ControlScan’s decision to sell its business in two parts came down to maximizing its return, ControlScan chief executive Mark Carl says via email.  

“PDI’s customers operate in the convenience retail and petroleum wholesale space, and security is a big focus for them, particularly this year. So, acquiring the managed security services piece of our business really made sense for their growth strategy,” Carl says. “Likewise, the managed compliance services side complemented Sysnet’s growth plans and enhanced their already strong payments compliance offering. Both companies were eager to acquire their respective parts.”