XML 23 R11.htm IDEA: XBRL DOCUMENT
v3.25.1

Acquisitions | 3 Months Ended
--- | ---
Mar. 31, 2025
Business Combinations [Abstract] |
Acquisitions | Note 3. Acquisitions 2024 Acquisition On October 31, 2024, the Company completed the acquisition of Sterling Check Corp. (“Sterling” and such acquisition, the “Sterling Acquisition”), a leading provider of background screening and identity verification services. The cash-and-stock transaction valued Sterling at approximately $2.2 billion and was financed through cash on hand and the issuance of new debt and common stock as described in Note 6, “Debt”. The acquisition extended First Advantage’s high-quality and cost-effective background screening, identity, and verification technology solutions for the benefit of both companies' customers across industry verticals and geographies. Sterling was determined to constitute a business and the Company was deemed to be the acquirer under ASC 805. The Company recorded a preliminary allocation of the purchase price to assets acquired and liabilities assumed based on their estimated fair values as of October 31, 2024. During the three months ended March 31, 2025, the Company recorded a $0.2 million adjustment related to the valuation of certain tax liabilities. The allocation of the purchase price is based on the fair value of assets acquired and liabilities assumed as of the acquisition date. The following table summarizes the consideration paid and the amounts recognized for the assets acquired and liabilities assumed (in thousands):
Consideration |  |  |
Cash consideration |  | $ | 1,152,163 |
Plus: fair value of assumed Sterling equity awards to receive cash attributable to pre-combination service |  |  | 15,905 |
Plus: repayment of Sterling's outstanding debt |  |  | 535,046 |
Plus: fair value of First Advantage common stock issued |  |  | 490,098 |
Plus: fair value of assumed Sterling equity awards to receive equity awards attributable to pre-combination service |  |  | 4,487 |
Total fair value of consideration transferred |  | $ | 2,197,699 |
Current assets |  | $ | 227,469 |
Property and equipment, including software developed for internal use |  |  | 273,370 |
Intangible assets |  |  | 717,000 |
Deferred tax asset |  |  | 58,100 |
Other assets |  |  | 12,516 |
Current liabilities |  |  | (150,026 | )
Deferred tax liability |  |  | (238,077 | )
Other liabilities |  |  | (16,226 | )
Total identifiable net assets |  | $ | 884,126 |
Goodwill |  | $ | 1,313,573 |
The fair values and useful lives of the acquired intangible assets by category were as follows (in thousands):
|  | Balance Sheet Location |  | Estimated Fair Values |  |  | Useful Life (in years)
Customer lists |  | Intangible assets, net |  | $ | 655,000 |  |  | 14 years
Software developed for internal use |  | Property and equipment, net |  |  | 259,000 |  |  | 5 years
Trade names |  | Intangible assets, net |  |  | 62,000 |  |  | 5 years
Goodwill recognized is not expected to be deductible for tax purposes. Results of operations have been included in the condensed consolidated financial statements of the Company’s Sterling segment since the date of acquisition. As of the date these condensed consolidated financial statements were issued, the purchase accounting related to this acquisition was incomplete as the valuation of deferred taxes and certain customary transaction adjustments were not yet finalized. The Company has reflected the provisional amounts in these consolidated financial statements. As such, the above balances may be adjusted in a future period as the valuation is finalized and these adjustments may be material to the consolidated financial statements. Pro Forma Results The following summary, prepared on a pro forma basis pursuant to ASC 805, presents the Company’s consolidated results of operations for the three months ended March 31, 2024, as if the Sterling Acquisition had been completed on January 1, 2023. The pro forma results below include the impact of certain adjustments related to the amortization of intangible assets, transaction-related costs incurred as of the acquisition date, and interest expense on related borrowings, and in each case, the related income tax effects, as well as certain other post-acquisition adjustments attributable to the Sterling Acquisition. This pro forma presentation does not include any impact of transaction synergies. The pro forma results are not necessarily indicative of the results of operations that actually would have been achieved had the Sterling Acquisition been consummated as of January 1, 2023.
(in thousands, unaudited) |  | Three Months Ended March 31, 2024 |
Revenue |  | $ | 355,136 |
Net loss |  | $ | (33,158 | )

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration