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Sterling Check Corp. (NASDAQ:STER), a provider of background and identity services, has taken a significant step toward its merger with First Advantage, a similar corporation. On Thursday, Sterling announced the mailing of the election form to its shareholders, marking a crucial phase in the acquisition process.
The merger agreement, initially announced on February 28, 2024, stipulates that Sterling will become an indirect, wholly-owned subsidiary of First Advantage. The transaction is expected to close in the fourth quarter of 2024.
Sterling's stockholders of record will need to decide on the form of merger consideration they wish to receive for their shares by submitting the election form to Equiniti Trust Company, the exchange agent.
The deadline for this election will be announced at least three business days prior to the set date, which will be five business days before the estimated closing of the merger. The company has engaged D.F. King & Co. as the information agent to assist shareholders during this process.
Additionally, the online portal for eligible holders of company common stock equivalents and unvested shares to make their elections opened on Thursday. This parallel process, managed by Fidelity Stock Plan Services, aligns with the timeline set for stockholders.
The merger is subject to customary closing conditions, including regulatory approvals, and there can be no guarantee that the transaction will be completed as planned. Shareholders can direct questions and requests for assistance to the exchange agent or the information agent, and additional copies of the election form are available upon request.
This merger aims to combine the strengths of Sterling and First Advantage, potentially creating a leading force in the background and identity services industry. The companies have previously stated that they expect the merger to bring significant benefits to their shareholders.
In other recent news, Sterling Check Corp. announced a shift in its financial leadership. Richard Dziadzio, currently serving as the Executive Vice President and Interim Chief Financial Officer, will take on the additional role of principal accounting officer. This change comes as Chief Accounting Officer Theresa Neri Strong takes maternity leave.
InvestingPro Insights
In light of Sterling Check Corp.'s (NASDAQ:STER) ongoing merger process with First Advantage, real-time data and analysis from InvestingPro provide an additional perspective on the company's financial health and market performance. As of the last twelve months leading up to Q2 2024, Sterling's market capitalization stands at $1.59 billion. Despite a slight decline in revenue growth by 0.32%, quarterly revenue growth shows a positive trend at 5.33%. The gross profit margin remains robust at 45.32%, indicating a solid ability to control costs relative to sales.
InvestingPro Tips suggest that while analysts have revised their earnings expectations downwards for the upcoming period, there is an anticipation of net income growth this year. Additionally, Sterling's stock has been trading with low price volatility, which could be appealing to investors seeking stability. For those interested in the company's valuation, it's worth noting that Sterling is trading at high EBIT and EBITDA valuation multiples. There are 10 additional InvestingPro Tips available for Sterling, offering deeper insights for investors considering their position in the context of the merger. To explore these further, visit https://www.investing.com/pro/STER.
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