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Acquisitions | 6 Months Ended
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Jun. 30, 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 six months ended June 30, 2025, the Company identified measurement period adjustments related to its preliminary allocation of the purchase price. The measurement period adjustments were due to revisions to estimates for working capital and tax balances, resulting in a $0.7 million decrease to current assets, a $5.8 million increase to current liabilities, a $0.1 million increase to deferred tax liabilities, and a $0.2 million decrease to other liabilities. The net impact of these adjustments was a $6.4 million increase to goodwill. The allocation was finalized as of June 30, 2025. The following table summarizes the consideration paid and the amounts recognized for the assets acquired and liabilities assumed as of June 30, 2025 (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 |  | $ | 226,800 |
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 |  |  | (155,596 | )
Deferred tax liability |  |  | (238,221 | )
Other liabilities |  |  | (16,075 | )
Total identifiable net assets |  | $ | 877,894 |
Goodwill |  | $ | 1,319,805 |
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 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. 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 and six months ended June 30, 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 June 30, 2024 |  |  | Six Months Ended June 30, 2024 |
Revenue |  | $ | 384,795 |  |  | $ | 739,931 |
Net loss |  | $ | (25,544 | ) |  | $ | (58,702 | )

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- 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
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