Clayton-backed ProfitPoint rings-up acquisition

Franklin firm won't say who it just bought, but sees manifold business boost

Email | Print By Milt Capps

Vaden Landers

ProfitPoint Inc. announced it has sharply increased the number of retailers using its electronic gift cards through the acquisition of an undisclosed competitor.

Co-Founder and CEO Vaden Landers wouldn't name the company being absorbed, but told NashvillePost.com this morning he believes ProfitPoint revenue will be running at the rate of $10 million annually, after operations are integrated.

Through the transaction, ProfitPoint picks up more than 12,000 gift-card processing locations, expanding to a total 20,000 sites. Landers said ProfitPoint's new customers now include Atlanta Bread Co. and Vitamin World. 

He says the acquisition means ProfitPoint has quickly gained some ground on top-ranked small-business competitor Valutec Card Solutions, which is also based in Franklin.

ProfitPoint's Series C round of financing closed in March. ProfitPoint is backed by major investors Clayton Associates, based in Franklin; and, New Spring Ventures of Radnor, Pa.  Also, Brentwood-based Comdata and its parent Ceridian own 2 percent of ProfitPoint, according to Landers.

When Comdata bought into ProfitPoint in 2004, then-Comdata CEO Gary Krow, who was recently fired in the midst of conflict with Ceridian management, spoke of the complementary nature of Comdata and ProfitPoint businesses.

Comdata also owns Stored Value Solutions, which Landers said is the largest provider of gift cards to the nation's major retailers, controlling about 40 percent of that market. Among its accounts are retailers Lowe's, Target and Home Depot.

In contrast, Landers said ProfitPoint focuses on the nation's estimated 5 million or more smaller retailers, only about 200,000 of which currently use e-gift cards.