공시 • Nov 01
First Advantage Corporation (NasdaqGS:FA) completed the acquisition of Sterling Check Corp. (NasdaqGS:STER) from a group of shareholders.
First Advantage Corporation (NasdaqGS:FA) entered into an agreement to acquire Sterling Check Corp. (NasdaqGS:STER) from a group of shareholders for $1.7 billion on February 28, 2024. The transaction consideration is comprised of approximately $1.2 billion in cash and 27.15 million shares of First Advantage common stock. Under the terms of the agreement, Sterling shareholders will elect to receive either $16.73 in cash or 0.979 shares of First Advantage common stock for each Sterling share. First Advantage will issue a combination of cash and stock valuing Sterling at approximately $2.2 billion, including Sterling’s outstanding debt. First Advantage intends to fund the cash portion of the transaction and retire existing Sterling debt through the issuance of $1.8 billion of new debt and the use of balance sheet cash and $250 million revolver capacity at close. First Advantage has secured fully committed financing from Bank of America, N.A., Barclays Bank PLC, Bank of Montreal, Jefferies Finance LLC and Royal Bank of Canada. Following the closing of the transaction, Scott Staples will continue to serve as Chief Executive Officer of First Advantage. Josh Peirez, Sterling’s Chief Executive Officer, will be offered a seat on the First Advantage Board of Directors. First Advantage will continue to be headquartered in Atlanta, GA.
The transaction has been unanimously approved by the Boards of Directors of both companies. The transaction is subject to required regulatory approvals, clearances, and other customary closing conditions. The Acquisition is subject to satisfaction or waiver of customary closing conditions, including, among others, adoption of the Merger Agreement by Sterling stockholders, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 (the “HSR Act”) and clearance under the antitrust or foreign direct investment laws of certain other jurisdictions, and the effectiveness of a registration statement on Form S-4 to be filed by First Advantage in connection with the Acquisition. On May 28, 2024, First Advantage and Sterling each received a request for additional information and documentary materials from the U.S. Department of Justice (the “DOJ”) in connection with the DOJ’s review of the proposed transaction contemplated by the Merger Agreement. The Second Request was issued under the notification requirements of HSR Act. The effect of the Second Request is to extend the waiting period imposed under the HSR Act until 30 days after Sterling and First Advantage have substantially complied with the Second Request, unless that period is extended voluntarily by the parties or terminated sooner by the DOJ. The transaction is expected to close in approximately the third quarter of 2024. As a result of the Second Request, the closing of the proposed transaction is now anticipated to occur in approximately the fourth quarter of 2024. Upon termination of the Merger Agreement under certain specified circumstances, including by the Company to enter into a definitive agreement with respect to a Superior Proposal in accordance with the terms of the Merger Agreement, the Company will be required to pay First Advantage a termination fee in the amount of $66.3 million. Upon termination of the Merger Agreement by either party because certain required antitrust approvals are not obtained (i) by the Initial Outside Date, First Advantage will be required to pay the Company a termination fee of $60 million or (ii) by the Extended Outside Date, First Advantage will be required to pay the Company a termination fee of $90 million. In addition, if First Advantage fails to consummate the Merger within five business days after all of the required conditions have been satisfied and the Company terminates the Merger Agreement as a result thereof, First Advantage will be required to pay the Company a termination fee of $100 million. As of October 22, 2024, the transaction is expected to close on October 31, 2024. As of October 29, 2024, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other regulatory review periods have expired.
J.P. Morgan Securities LLC acted as lead financial advisor to First Advantage. Barclays Bank PLC, BofA Securities, Inc., BMO Capital Markets Corp., Jefferies Finance LLC, RBC Capital Markets, Citizens Capital Markets, HSBC, KKR Capital Markets LLC, Stifel, and Wells Fargo Securities, LLC also served as financial advisors to First Advantage. Elizabeth Cooper, Mark Viera, Ken Wallach, Hui Lin, Jennifer Nadborny, Catherine Burns, Tristan Brown, Russell Light, Lori Lesser, Krista McManus, Dennis Loiacono and Jonathan Lindabury of Simpson Thacher & Bartlett LLP acted as legal counsel to First Advantage. Goldman Sachs & Co. LLC and Citigroup Global Markets Inc. acted as financial advisors and fairness opinion providers to Sterling. Goldman will receive a fee of up to $30 million for its services. Citigroup will receive a fee of up to $20 million for its services, of which $5 million is payable in connection with the delivery of the opinion. Christopher Ewan and Andrea Gede-Lange of Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal counsels to Sterling. Stuart Rogers of Alston & Bird LLP represented Citigroup as financial advisor to Sterling. Equiniti Trust Company, LLC is the Sterling’s transfer agent. D.F. King & Co., Inc. acted as information agent to First Advantage Corporation.
First Advantage Corporation (NasdaqGS:FA) completed the acquisition of Sterling Check Corp. (NasdaqGS:STER) from a group of shareholders on October 31, 2024.