First Advantage Corp Files 8-K: Acquisition, Officer Changes, Asset Disposition

TL;DR

FA stock on the move: Sterling acquisition, new execs, and asset sale announced.

AI Summary

On October 30, 2024, First Advantage Corporation entered into a Material Definitive Agreement related to its acquisition of Sterling Talent Solutions. The company also announced the departure of certain officers and the appointment of new ones, alongside a new compensatory arrangement. Additionally, First Advantage Corporation completed the disposition of assets.

Why It Matters

This filing indicates significant corporate actions including an acquisition and changes in leadership, which could impact the company's strategic direction and financial performance.

Risk Assessment

Risk Level: medium — The filing details a material definitive agreement for an acquisition and changes in executive officers, which introduces potential integration risks and strategic uncertainties.

Key Players & Entities

• First Advantage Corporation (company) — Registrant
• Sterling Talent Solutions (company) — Acquisition Target
• 0000950170-24-119269 (document_id) — Accession Number
• 20241030 (date) — Report Date

FAQ

Key Financial Figures

• $0.001 — nge on which registered Common Stock, $0.001 par value per share FA The Nasdaq S
• $0.01 — Each share of common stock, par value $0.01 per share, of Sterling (each, a share o
• $16.73 — hereof) (the "Merger Consideration"): $16.73 in cash, without interest (the "Cash Co
• $564,723,743.72 — e "B-1 Term Loans") with a new class of $564,723,743.72 of senior secured term loans (the "B-2
• $1,620,276,256 — oan in an aggregate principal amount of $1,620,276,256.28, which, together with the B-2 Term L
• $2,185 million — enior secured term loans outstanding to $2,185 million (the "Term Loans"), (iii) refinance and
• $100 million — iii) refinance and replace the existing $100 million of revolving credit commitments and ups
• $150 m — ing credit commitments by an additional $150 million, bringing the total revolving com
• $250 million — nging the total revolving commitment to $250 million (the "Revolving Credit Facility"), (iv)
• $450,000 — fficer Bonus Amount Scott Staples $450,000 Steven Marks $450,000 Bret Jardin
• $450,000 B — ott Staples $450,000 Steven Marks $450,000 Bret Jardine $450,000 David Gamsey
• $200,000 — avid Gamsey $450,000 Joelle Smith $200,000 Compensation Amendments The compens
• $700,000 — nnual Incentive Bonus Scott Staples $700,000 $525,000 Steven Marks $450,000
• $525,000 — tive Bonus Scott Staples $700,000 $525,000 Steven Marks $450,000 $225,000
• $225,000 B — $525,000 Steven Marks $450,000 $225,000 Bret Jardine $450,000 $225,000 New

Filing Documents

• fa-20241030.htm (8-K) — 93KB
• fa-ex10_1.htm (EX-10.1) — 35KB
• fa-ex10_2.htm (EX-10.2) — 2219KB
• fa-ex99_1.htm (EX-99.1) — 27KB
• 0000950170-24-119269.txt ( ) — 2825KB
• fa-20241030.xsd (EX-101.SCH) — 25KB
• fa-20241030_htm.xml (XML) — 5KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. The information set forth in Items 1.02, 2.01 and 2.03 of this Current Report on Form 8-K, with respect to Amendment No. 4 and the letter agreement related to the termination of the Stockholders' Agreement (each as defined below), as applicable, is incorporated by reference into this Item 1.01.

02. Termination of a Material Definitive Agreement

Item 1.02. Termination of a Material Definitive Agreement. The information set forth in Item 2.01 of this Current Report on Form 8-K with respect to the termination of the Stockholders' Agreement is incorporated by reference into this Item 1.02.

01 Completion of Acquisition or Disposition of Assets

Item 2.01 Completion of Acquisition or Disposition of Assets. On October 31, 2024, First Advantage Corporation, a Delaware corporation ("First Advantage"), completed the acquisition (such acquisition, the "Transaction") of Sterling Check Corp., a Delaware corporation ("Sterling"), pursuant to the Agreement and Plan of Merger, dated as of February 28, 2024 (the "Merger Agreement"), by and among First Advantage, Sterling, and Starter Merger Sub, Inc., a Delaware corporation and an indirect, wholly-owned subsidiary of First Advantage ("Merger Sub"). Pursuant to and subject to the terms of the Merger Agreement, Merger Sub merged with and into Sterling, with Sterling surviving the merger with Merger Sub and becoming an indirect, wholly-owned subsidiary of First Advantage. Each share of common stock, par value $0.01 per share, of Sterling (each, a share of "Sterling Common Stock") issued and outstanding immediately prior to the effective time of the Transaction (the "Effective Time"), other than shares of Sterling Common Stock (i) owned or held in treasury by Sterling or owned by First Advantage or Merger Sub (which were cancelled), (ii) owned by stockholders who properly exercised and perfected appraisal rights under Delaware law or (iii) owned by any wholly-owned subsidiary of Sterling, was converted into the right to receive, at the election of the holder of such shares of Sterling Common Stock, and subject to proration in accordance with the Merger Agreement as described below, one of the following forms of consideration (or a combination thereof) (the "Merger Consideration"): $16.73 in cash, without interest (the "Cash Consideration") per share of Sterling Common Stock; or 0.979 (the "Exchange Ratio") of a share of common stock, par value $0.001 per share, of First Advantage (each, a share of "First Advantage Common Stock") per share of Sterling Common Stock (the "Stock Consideration"). The Merger Consideration was subject to proration, such that the total

01. Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure. On October 31, 2024, First Advantage issued a press release announcing the completion of its acquisition of Sterling. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information furnished under this Item 7.01, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as otherwise expressly stated by specific reference in any such filing.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (a) Financial Statements of Businesses Acquired Financial statements of Sterling are not required to be filed in this Current Report on Form 8-K because substantially the same information that would otherwise be required under this Item 9.01(a) was previously incorporated by reference into the Registration Statement and related information statement/prospectus. (b) Pro Forma Financial Information Unaudited pro forma financial information and related notes thereto for First Advantage, after giving effect to the Transaction and adjustments described in such pro forma financial information are not required to be filed under this Item 9.01(b) because substantially the same information that would otherwise be required under this Item 9.01(b) was previously included in the Registration Statement and related information statement/prospectus, under the caption "Unaudited Pro Forma Condensed Combined Financial Information." (d) Exhibits Exhibit Number Description 2.1 Agreement and Plan of Merger, dated as of February 28, 2024, by and among First Advantage Corporation, Sterling Check Corp. and Starter Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to First Advantage Corporation's Registration Statement on Form S-4 filed on April 29, 2024). 2.2 Waiver of Brazil Antitrust Filing Obligation and Closing Condition, dated as of March 25, 2024, related to the Agreement and Plan of Merger, dated as of February 28, 2024, by and among First Advantage Corporation, Sterling Check Corp. and Starter Merger Sub, Inc. (incorporated by reference to Exhibit 2.2 to First Advantage Corporation's Form 10-Q filed on May 9, 2024). 10.1 Letter Agreement, dated as of October 31, 2024, by and among First Advantage Corporation, Broad Street Principal Investments, L.L.C., Checkers Control Partnership, L.P., Broad Street Control Advisors, L.L.C. and the other parties thereto. 10.2 Amendment No. 4 to the First Lien Cr

Forward-Looking Statements

Forward-Looking Statements This Current Report on Form 8-K relates to a business combination transaction between First Advantage and Sterling. This report and any documents referred to in this report contain forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act. Forward-looking statements can be identified by forward-looking terminology such as "aim," "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "projection," "seek," "should," "will" or "would," or the negative thereof or other variations thereon or comparable terminology. In particular, statements that address First Advantage's future performance, business strategy, future operations, estimates and projections of revenues, losses, costs, expenses, returns, cash flow, and financial position, anticipated benefits of strategic transactions (including acquisitions and divestitures), and plans and objectives of management (including plans for future cash flow from operations), contained in this report or any documents referred to herein are forward-looking statements. These statements also include, but are not limited to, statements regarding the expected benefits of the Transaction to First Advantage and its stockholders and the anticipated timing thereof. First Advantage has based these forward-looking statements on current expectations, assumptions, estimates and projections. Such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond First Advantage's control. Many factors could cause actual future events to differ materially from the forward-looking statements in this report, including but not limited to: (i) the effect of the announcement of the Transaction on First Advantage's business relationships, operating results, and business generally, (ii) risks that the Transaction disrupts c

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FIRST ADVANTAGE CORPORATION Date: October 31, 2024 By: /s/ David L. Gamsey Name: David L. Gamsey Title: Executive Vice President & Chief Financial Officer

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View this 8-K filing on SEC EDGAR