Goldman Sachs Group Inc. (NYSE:GS) has reported a significant transaction involving its holdings in Sterling Check Corp. (NASDAQ:STER). According to a recent SEC filing, Goldman Sachs disposed of 49,807,744 shares of Sterling Check common stock. The sale was completed at a price of $16.73 per share, as part of a merger agreement between Sterling Check Corp. and First Advantage Corporation.
The transaction, which took place on October 31, 2024, resulted in Goldman Sachs and its affiliates, including Broad Street Principal Investments, L.L.C. and Checkers Control Partnership, L.P., relinquishing all their shares in Sterling Check. The sale was executed under the terms of the merger agreement, which allowed shareholders to choose between cash or stock consideration.
Following this transaction, Goldman Sachs and its related entities no longer hold any shares in Sterling Check Corp. This move aligns with the broader strategic decisions of the financial group as it continues to manage its investment portfolio.
In other recent news, Sterling Check Corp. has successfully completed its merger with First Advantage Corporation, resulting in significant changes in the company's structure and governance. The merger has led to the termination of a material definitive agreement, the repayment of all outstanding term loans, and changes in control and corporate governance. Sterling Check has now become an indirect, wholly-owned subsidiary of First Advantage, with all existing directors and officers ceasing their roles.
In line with these developments, Sterling Check has also advanced its merger process by sending out election forms to its shareholders, a crucial phase in the acquisition process. This move is an important step toward the expected completion of the merger in the fourth quarter of 2024.
In addition, Sterling Check has announced a shift in its financial leadership due to the maternity leave of Chief Accounting Officer Theresa Neri Strong. Richard Dziadzio, currently serving as the Executive Vice President and Interim Chief Financial Officer, will assume the role of principal accounting officer during her absence. These are recent developments, reflecting the ongoing evolution of Sterling Check Corp.
InvestingPro Insights
The recent divestment by Goldman Sachs of its Sterling Check Corp. (NASDAQ:STER) holdings aligns with several key financial indicators and market trends for the company. According to InvestingPro data, Sterling Check's market capitalization stands at $8.93 billion, reflecting its position in the market following the merger with First Advantage Corporation.
InvestingPro Tips highlight that Sterling Check's stock generally trades with low price volatility, which may have factored into Goldman Sachs' decision-making process regarding the timing of the sale. Additionally, the company's liquid assets exceed short-term obligations, suggesting a stable financial position that could have influenced the terms of the merger agreement.
It's worth noting that while Sterling Check was not profitable over the last twelve months, with a negative basic EPS of -$0.12, InvestingPro Tips indicate that analysts predict the company will be profitable this year. This projection, coupled with the expectation that net income is set to grow, may have played a role in the valuation considerations during the merger negotiations.
The company's revenue for the last twelve months as of Q3 2024 was $9.91 billion, with a revenue growth of 6.3% in Q3 2024. However, the year-over-year revenue growth shows a decline of 11.75%, which could have been a factor in Goldman Sachs' decision to exit its position.
For investors seeking more comprehensive analysis, InvestingPro offers 8 additional tips for Sterling Check Corp., providing a deeper understanding of the company's financial health and market position.
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