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FIRST ADVANTAGE TO ACQUIRE STERLING CHECK CORP. FOR $2.2 BILLION IN CASH AND
STOCK 

February 29th, 2024
Share this post
 * Extends 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 
 * Enables increased investment in Artificial Intelligence and next-generation
   Digital Identification technologies for enhanced customer and applicant
   experience 
 * Drives attractive total shareholder return outlook, including at least $50
   million of synergies, implying expected double-digit Adjusted EPS accretion
   immediately on a run-rate synergy basis and accelerated earnings growth
   potential from topline development, synergies, and deleveraging 

ATLANTA, Georgia and INDEPENDENCE, Ohio, February 29, 2024 – First Advantage
Corporation (NASDAQ:FA), a leading provider of employment background screening,
identity, and verification solutions, announced today that it has entered into a
definitive purchase agreement to acquire Sterling Check Corp. (NASDAQ:STER), a
provider of background screening and identity services. First Advantage will
issue a combination of cash and stock valuing Sterling at approximately $2.2
billion, including Sterling’s outstanding debt. 

First Advantage and Sterling offer complementary technology solutions and
services that enable employers across healthcare, retail & e-commerce,
transportation, manufacturing, financial services, and other industries to
manage risk and hire the best talent. Customers will benefit from accelerated
investment in innovation and access to a broader suite of products and solutions
to meet their needs, fueling growth of the combined company. 

Building on pro forma combined revenue of $1.5 billion for the year ended
December 31, 2023, the transaction is expected to deliver at least $50 million
in run-rate synergies, implying immediate double-digit EPS accretion on a
run-rate synergy basis. The combined company will have greater diversification
of revenue across customer segments, industries, and geographies, reducing
seasonality and improving resource planning and operational efficiency. 

Following the transaction, we expect First Advantage to continue compounding EPS
at a teens growth rate over time through a combination of topline growth,
ongoing synergy capture, and significant deleveraging via strong organic free
cash flow generation. First Advantage will share additional forward-looking
financial information regarding the transaction’s impact at or around the time
of closing. 

“We are thrilled to announce the acquisition of Sterling, demonstrating our
commitment to delivering high- quality, cost-effective employment background
screening and identity verification solutions that enhance value for customers
by helping them hire smarter and onboard faster, while also positioning First
Advantage for long- term value creation,” said Scott Staples, Chief Executive
Officer of First Advantage. “This combination unlocks efficiencies and
opportunities to fuel incremental growth and invest in new technology solutions,
including AI- driven automation, while further diversifying our business for
greater resilience. We look forward to welcoming Sterling’s talented employees
to First Advantage and implementing best practices from both organizations to
better address the needs of applicants and employers of all sizes and across all
verticals.” 

“We are excited to be combining with First Advantage to accelerate Sterling’s
strategic goals and deliver added value for our company, shareholders, clients,
and employees,” said Josh Peirez, Chief Executive Officer of Sterling. “We look
forward to offering clients a broader suite of solutions, while maintaining the
excellent service they have come to expect. Importantly, this transaction
delivers immediate value to Sterling shareholders, as well as the opportunity to
participate in the compelling, long-term upside potential of a combined company
that is positioned better than ever to serve the dynamic needs of our
customers.” 

Certain entities advised by or affiliated with Goldman Sachs & Co. LLC., which
own approximately 52.8% of Sterling’s outstanding shares, entered into a support
agreement pursuant to which they have delivered a written consent approving the
transaction. CDPQ is an investor in one of these entities. 

“Goldman Sachs and CDPQ are very pleased with Sterling’s performance over the
last eight years. Josh has been an outstanding leader and partner, growing the
business, and successfully bringing the company to the public markets. We are
excited by the transformational opportunity offered by combining with First
Advantage,” said Adrian Jones, Global Chairman & Co-Head of the Private Equity
business within Goldman Sachs Asset Management. 

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. 

Transaction Details 

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. The
shareholder election will be subject to proration, resulting in approximately
72% of Sterling’s shares being exchanged for cash consideration and 28% being
exchanged for First Advantage common stock. The $16.73 per share consideration
represents a premium of 35% to Sterling’s closing price of $12.42 on February
28, 2024, and a 26% premium to Sterling’s 30-day volume weighted average price
(VWAP). Sterling shareholders are expected to own approximately 16% of the
combined company after closing, and current First Advantage shareholders will
own approximately 84%. 

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. 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. 

The transaction has been unanimously approved by the Boards of Directors of both
companies. 

The transaction is expected to close in approximately the third quarter of 2024,
with the closing and timing thereof subject to required regulatory approvals,
clearances, and other customary closing conditions. 

Advisors 

J.P. Morgan Securities LLC acted as lead financial advisor to First Advantage.
BofA Securities, Inc., Barclays Bank PLC, BMO Capital Markets Corp., Jefferies
Finance LLC and RBC Capital Markets also served as financial advisors to First
Advantage. Simpson Thacher & Bartlett LLP served as First Advantage’s legal
counsel in the transaction. 

Goldman Sachs & Co. LLC and Citigroup Global Markets Inc. acted as financial
advisors to Sterling. Fried, Frank, Harris, Shriver & Jacobson LLP served as
Sterling’s legal counsel in the transaction. 

Conference Call and Webcast Information 

First Advantage will host a conference call to review its fourth quarter and
full year 2023 results and discuss details of the Sterling acquisition today,
February 29, 2024, at 8:30 a.m. ET. 

The call will be webcast live on the Company’s investor relations website at
https://investors.fadv.com under the “News & Events” and “Events &
Presentations” sections, where related presentation materials will be posted
before the conference call. 

Following the conference call, a replay of the webcast will be available on the
Company’s investor relations website, https://investors.fadv.com. Alternatively,
the live webcast and subsequent replay will be available at
https://event.on24.com/wcc/r/4450900/D4362414C8BAE251D42253413CDB11CB. 

About First Advantage 

First Advantage (NASDAQ:FA) is a leading provider of employment background
screening, identity, and verification solutions. First Advantage delivers
innovative services and insights that help customers manage risk and hire the
best talent. Enabled by its proprietary technology, First Advantage helps
companies protect their brands and provide safer environments for their
customers and their most important resources: employees, contractors, contingent
workers, tenants, and drivers. Headquartered in Atlanta, Georgia, First
Advantage performs screens in over 200 countries and territories on behalf of
more than 30,000 customers. For more information about First Advantage, visit
its website at https://fadv.com/. 

About Sterling Check Corp. 

Sterling (NASDAQ:STER) is a leading provider of background and identity
services, helping over 50,000 clients create people-first cultures built on a
foundation of trust and safety. Sterling’s tech-enabled services help
organizations across all industries and regions establish great environments for
their workers, partners, and customers. With operations in North America,
Europe, the Middle East, Asia Pacific, and Latin America, Sterling conducts more
than 100 million annual searches. For more information about Sterling, visit its
website at https://www.sterlingcheck.com/.  

No Offer or Solicitation 

This communication is for informational purposes only and is not intended to and
does not constitute, or form a part of, an offer, invitation or the solicitation
of an offer or invitation to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of any securities, or a solicitation of any vote or approval
in any jurisdiction, pursuant to the

proposed transaction or otherwise, nor shall there be any sale, issuance or
transfer of securities in any jurisdiction in which such sale, issuance or
transfer of securities would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offering of securities
shall be made, except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act of 1933, as amended. 

Additional Information about the Merger and Where to Find It 

In connection with the proposed transaction, First Advantage Corporation (“First
Advantage”) intends to file with the SEC a registration statement on Form S-4
that will include an information statement of Sterling Check Corp. (“Sterling”)
and that also constitutes a prospectus of First Advantage. Each of First
Advantage and Sterling may also file other relevant documents with the SEC
regarding the proposed transaction. This document is not a substitute for the
information statement/prospectus or registration statement or any other document
that First Advantage or Sterling may file with the SEC. The information
statement/prospectus (if and when available) will be mailed to stockholders of
First Advantage and Sterling. INVESTORS AND SECURITY HOLDERS OF FIRST ADVANTAGE
AND STERLING ARE URGED TO READ THE REGISTRATION STATEMENT, INFORMATION
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE
SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND
IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and
security holders will be able to obtain free copies of the registration
statement and information statement/prospectus (if and when available) and other
documents containing important information about First Advantage, Sterling and
the proposed transaction, once such documents are filed with the SEC through the
website maintained by the SEC at www.sec.gov. Copies of the documents filed with
the SEC by First Advantage will be available free of charge on First Advantage’s
website at https://fadv.com/ or by contacting First Advantage’s Investor
Relations department at investors@fadv.com. Copies of the documents filed with
the SEC by Sterling will be available free of charge on Sterling’s website at
https://www.sterlingcheck.com/ or by contacting Sterling’s Investor Relations
department at IR@sterlingcheck.com. 

Forward-Looking Statements 

This release and any documents referred to in this release contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the “Securities Act”), and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and it is
intended that all forward- looking statements that Sterling or First Advantage
make will be subject to the safe harbor protections created thereby.
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 Sterling’s and
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 release 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 proposed transaction to Sterling and First Advantage
and each of their stockholders and the anticipated timing thereof. Sterling and
First Advantage have 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 Sterling and First Advantage’s control.
Many factors could cause actual future events to differ materially from the
forward-looking statements in this release, including but not limited to: (i)
the risk that the proposed transaction may not be completed in a timely manner
or at all, (ii) the failure to satisfy the conditions to the consummation of the
proposed transaction, including the receipt of certain governmental and
regulatory approvals, (iii) the occurrence of any event, change or other
circumstance that could give rise to the termination of the Merger Agreement,
(iv) the effect of the announcement or pendency of the proposed transaction on
Sterling’s business relationships, operating results, and business generally,
(v) risks that the proposed transaction disrupts current plans and operations of
Sterling or First Advantage and potential difficulties in Sterling employee
retention as a result of the proposed transaction, (vi) risks related to
diverting management’s attention from Sterling’s ongoing business operations,
(vii) unexpected costs, charges or expenses resulting from the proposed
transaction, (viii) certain restrictions during the pendency of the proposed
transaction that may impact Sterling’s ability to pursue certain business
opportunities or strategic transactions and (ix) the outcome of any legal
proceedings that may be instituted against First Advantage or against Sterling
related to the Merger Agreement or the proposed transaction. These and other
important factors, including those discussed more fully elsewhere in this
release and in Sterling and First Advantage’s filings with the SEC, including
their respective Forms 10-K, 10-Q and 8-K, may cause actual results, performance
or achievements to differ materially from those expressed or implied by these
forward-looking statements. The forward-looking statements contained in this
release are not guarantees of future performance and actual results of
operations, financial condition, and liquidity, and the development of the
industry in which each of Sterling and First Advantage operates, may differ
materially from the forward- looking statements contained in this release. Any
forward-looking statement made in this release speaks only as of the date of
such statement. Except as required by law, neither Sterling nor First Advantage
undertakes any obligation to update or revise, or to publicly announce any
update or revision to, any of the forward-looking statements, whether as a
result of new information, future events or otherwise, after the date of this
release. 

First Advantage Contacts 

Investors: Stephanie Gorman 

Investors@fadv.com 

Media: 

Liz Zale / Lindsay Molk FGS Global 

FirstAdvantage@fgsglobal.com 

Sterling Check Corp. Contacts 

Investors: 

Judah Sokel IR@sterlingcheck.com 

Media: 

Angela Stelle Angela.Stelle@sterlingcheck.com

Sterling is not a law firm. This publication is for informational purposes only
and nothing contained in it should be construed as legal advice. We expressly
disclaim any warranty or responsibility for damages arising out this
information. We encourage you to consult with legal counsel regarding your
specific needs. We do not undertake any duty to update previously posted
materials.


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