Here at iprospectcheck, we estimate that more than two thirds of the background checks in our industry are now performed by companies that have recently become publicly traded companies.
So, why is this a problem?
Publicly traded companies answer to shareholders instead of customers. One day, you are a valued client, and the next day you are the product. Your satisfaction as a client now takes a distant backseat to quarterly earnings performance and the creation of shareholder value.
This could impact the speed and accuracy of your background checks, and the quality of the customer service you receive.
In this blog, we’ll discuss the trend of background screening companies being acquired, and how to find a background check provider that will remain accountable and committed to you.
Let’s dive in.
Background Screening Company Acquisitions by the Numbers
Most or maybe even all the recent background screening company acquisitions involve capital restructuring and venture capital via private equity groups and similar entities.
This is important, because venture capital firms will always buy a company with one eye on the exit.
What this ultimately means is that these companies will all recapitalize again in about 5-7 years.
And, when they do, they may leave your background-checking program at the whim of the new strategic direction again and again.
Here are just a few of the background screening providers and supply chain companies that have been acquired in recent years:
Employment Screening Resources
One of the acquisitions that made the biggest headlines was that of Employment Screening Resources (ESR). This firm was founded by the highly respected industry veteran Les Rosen and was a serious competitor in the industry.
ESR was acquired by ClearStar, Inc. on December 01, 2021.
Securitec Screening Solutions, Inc.
Securitec Screening Solutions, Inc. provided wholesale, proprietary Court Data as a Service (CDaaS) for the background screening industry. The company was acquired by Appriss in October of 2020.
Appriss, for its part, was later swallowed up by Equifax, which paid $1.825 billion to acquire Appriss. This move was an important strategic decision for Equifax, which has been working to expand its workforce solutions operations, one of the fastest-growing parts of its business.
Verified Credentials, Inc.
In December of 2021, Iron Creek Partners LLC (“Iron Creek”), a private investment firm based in Santa Fe, NM, announced the recapitalization of Verified Credentials, Inc.
Verified Credentials, Inc. was a provider of background screening solutions for companies around the country.
The Mississippi Public Records Division from The Discovery Group
Recently, Wholesale Screening Solutions acquired the Mississippi Public Records Division from The Discovery Group.
Wholesale Screening Solutions stands out as the leading provider of public records for consumer reporting agencies and background check providers.
Background Screening Companies Going Public
In addition to the dizzying number of acquisitions happening, background screening companies are also going public at an alarming rate.
Here are just a few that went public in the last 12 months:
Sterling Check recently set its IPO terms with an initial valuation of $2.1 billion.
The company initially hoped to raise up to $104.7 million and offer 4.76 million shares at about $20 to $22 a share.
First Advantage Corp. announced in June of 2021 that they would sell 17.8 million shares between $13 and $15 each during its initial public offering.
The company reported expected net proceeds of about $227.6 million.
HireRight Holdings Corp. struggled in its initial public offering, with stocks opening at 5.3% below its expected offering price.
The company was valued at $1.43 billion when it went public.
Checkr, another big name in the background screening industry, recently raised $250 million in Series E funding, rocketing the company to a valuation of $4.6 billion.
While Checkr has yet to announce its IPO, we expect them to go public shortly.
Wholesale Screening Solutions and SJV Data Solutions
Recently, Gallant Capital invested in SJV Data Solutions and Wholesale Screening Solutions to create one super company that would stand out as one of the largest providers of background screening data in the country.
This kind of merger is becoming more and more popular in the background checking industry.
What Does This Mean for HR Managers and Employers?
While the topic of mergers and acquisitions sounds abstract, it will have real impacts on HR managers and employers.
For one, acquisitions and mergers like those named above will change the way companies like yours screen applicants.
It may be difficult to get the same level of customer service you’re used to, for example, especially if the company you trusted was acquired by a publicly traded company who is suddenly concerned with reporting to shareholders rather than clients.
Alternatively, the company you’ve relied on could just stop providing the services you need, especially if it was acquired or absorbed by a much larger company. This could leave you without the tools, support, or bandwidth to conduct the pre-employment screenings you need.
In a worst case and very real scenario, you may love your background screening partner who gets acquired by a company that you have a negative history with. You may have, in fact, left the acquiring company before for good reasons!
iprospectcheck is Here For You
In this tumultuous environment, why choose iprospectcheck as your background check provider?
Here are a few of the things that keep our customers coming back:
We’re Committed to You
Our company was built on one mission: serving customers in all industries.
To this day, we’re driven by serving people. We take a people over profits approach. We respond immediately to all client requests and work hard to make your day better.
When we deal with your candidates, we serve them transparently, and work to help your company make a great impression on your would-be hires.
Our company is stable and steady and promises to continue providing the services you rely on, uninterrupted, for years to come. We believe in serving our clients and their candidates to the highest level.
We’re Privately Owned
Unlike the other background check companies on this list, who have either been swallowed up by larger companies or chosen to go public, we are a privately owned company with low turnover of key personnel and clients.
Unlike bigger companies that are driven by a bottom line, our shareholders work in and on the business every single day.
We Provide a Variety of Services
We know that modern hiring is complex. Fortunately, our team provides a variety of services to help you check all your boxes.
Come to us for background checks, verifications, clinical services (including DOT and non-DOT drug testing and health screening) and e-verify services. Our goal is to function as a one-stop-shop for all your screening needs.
We Help You Create a Safe Workplace
We pride ourselves on our comprehensive screening options. When you work with us, you can trust that our background checks pull from county, federal, and statewide criminal records, national criminal records database searches, global terrorist watch lists, national sex offender registries, and more.
The background check we produce for you will be complete, reliable and FCRA-compliant, so you can make the right hiring decision every time. You can always trust that all records reported will be verified with the most reliable source and will contain the most current information available.
We Provide Fast Turnaround Time
We understand that you can’t afford to wait forever for background check services. To help you move candidates through the pipeline as quickly as possible, we turn our background checks around quickly.
Some inquiries, like motor vehicle records, credit reports, and identity checks come back instantly. Others, like criminal records searches and verifications can be delivered in 1-3 business days.
No matter what you need, our team will provide fast, reliable service that helps you keep moving forward.
We Offer Customizable Packages
If you’re hiring for many open positions, we offer packages designed to cater to low- and high-volume background check needs.
Whether you need to conduct 50 or 500 background checks a year, we offer a package designed to save you time, effort, and money.
iprospectcheck: Your Committed Background Screening Provider
When it comes to this industry, change is constant. Today, smaller background check companies everywhere are being acquired by big screening companies, and large companies are going public left and right.
It’s a confusing time that can place both your customer service and background check capabilities in question.
What happens if the company you’ve been using gets snapped up by a larger firm? What if they suddenly become more concerned about shareholders than they are about you?
Amid all this uncertainty, we can promise you one thing: iprospectcheck is here to stay.
Our team is committed to providing excellent customer service and reliable background check offerings both now and in the future.
Stop compromising with your background check services or relying on a company that might not be there for you tomorrow. Instead, work with a team that truly has your back – no matter what.
To learn more about our background check services and request a demo, request a consultation today.