Sterling Check Corp. (STER) has announced an agreement to be acquired by First Advantage Corp. (FA) for approximately $2.2 billion, inclusive of its outstanding debt. Following this news the stock is surging 24% in the pre-market.
The acquisition is in consideration of roughly $1.2 billion in cash and 27.15 million shares of First Advantage common stock.
Upon completion, Sterling shareholders are expected to own approximately 16 percent of the combined entity, while current First Advantage shareholders will retain the remaining 84 percent.
The merger aims to diversify the revenue sources across different customer segments, industries, and regions, leading to reduced seasonality and improved operational effectiveness.
Following the finalization of the deal, Josh Peirez, CEO of Sterling, will join the Board of Directors at First Advantage.
The acquisition is scheduled to be finalized in the third quarter of 2024.
In pre-market activity on the Nasdaq, the shares are trading at $15.50, up 24.80%.
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