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Table of Contents
As filed with the Securities and Exchange Commission on November 8, 2021
Registration No. 333-        
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM
S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
 
 
First Advantage Corporation
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
 
7374
 
84-3884690
(State or other jurisdiction of
incorporation or organization)
 
(Primary Standard Industrial
Classification Code Number)
 
(I.R.S. Employer
Identification No.)
 
 
1 Concourse Parkway NE, Suite 200
Atlanta, Georgia 30328
(888)
314-9761
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
 
 
Bret T. Jardine
Executive Vice President, General Counsel
First Advantage Corporation
1 Concourse Parkway NE, Suite 200
Atlanta, Georgia 30328
(888)
314-9761
(Name, address, including zip code, and telephone number, including area code, of registrant’s agent for service)
 
 
With copies to:
 
Kenneth B. Wallach, Esq.
Xiaohui (Hui) Lin, Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
(212)
455-2000
 
Alan F. Denenberg, Esq.
Davis Polk & Wardwell LLP
1600 El Camino Real
Menlo Park, California 94025
(650)
752-2000
 
John G. Crowley, Esq.
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
(212)
450-4000
 
 
Approximate date of commencement of proposed sale to the public
: As soon as practicable after this Registration Statement is declared effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:  ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule
12b-2
of the Exchange Act:
 
Large accelerated filer      Accelerated filer  
       
Non-accelerated
filer
     Smaller reporting company  
       
         Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  
 
 
CALCULATION OF REGISTRATION FEE
 
 
Title of Each Class of
Securities to be Registered
 
Amount to
be Registered(1)
 
Proposed Maximum
Aggregate Offering
Price Per Share(2)
 
Proposed
Maximum
Aggregate
Offering Price(1)(2)
 
Amount of
Registration Fee
Common Stock, $0.001 par value per share
 
17,250,000
 
$18.9975
 
$327,706,875
 
$30,379
 
 
 
(1)
Includes 2,250,000 shares of common stock that the underwriters have the option to purchase. See “Underwriting.”
(2)
Estimated solely for the purpose of determining the amount of the registration fee in accordance with Rule 457(c) promulgated under the Securities Act of 1933, as amended. The proposed maximum offering price per share and proposed maximum aggregate offering price are based on the average of the high and low sales prices of the Registrant’s common stock as reported on the Nasdaq Global Select Market on November 1, 2021.
 
 
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
 
 
 

Table of Contents
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities nor a solicitation of an offer to buy these securities in any jurisdiction where the offer and sale is not permitted.
 
Subject to completion, dated November 8, 2021
Preliminary Prospectus
15,000,000 Shares
 
FIRST ADVANTAGE CORPORATION
Common Stock
 
 
The selling stockholders named in this prospectus, including members of management, are offering 15,000,000 shares of common stock. We will not be selling any shares in this offering and we will not receive any proceeds from the sale of our common stock by the selling stockholders.
Our common stock is listed on the Nasdaq Global Select Market (“Nasdaq”), under the symbol “FA.” On November 5, 2021, the closing sales price of our common stock as reported on Nasdaq was $21.05 per share.
We are an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act of 1933, as amended (the “Securities Act”), and, as such, we have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. Following this offering and the in-kind distribution by Silver Lake, as we refer to these investors in this prospectus, of certain shares of our common stock held by it following the closing of this offering, Silver Lake will control 60.7% (or 58.9% if the underwriters exercise in full their option to purchase additional shares of our common stock) of the voting power of our shares eligible to vote in the election of our directors. As a result, we qualify as a “controlled company” within the meaning of the corporate governance standards of Nasdaq, but we do not currently avail ourselves of the related exemptions from certain corporate governance requirements. See “Management—Controlled Company Exemption.”
 
 
Investing in our common stock involves risks. See “Risk Factors” beginning on page 20 to read about factors you should consider before buying shares of our common stock.
 
 
Neither the Securities and Exchange Commission (the “SEC”), nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
 
    
Per share
    
Total
 
Public offering price
   $        $    
Underwriting discounts and commissions
(1)
   $        $    
Proceeds, before expenses, to the selling stockholders
   $        $    
 
(1)
See “Underwriting” for additional information regarding underwriting compensation.
To the extent that the underwriters sell more than 15,000,000 shares of our common stock, the underwriters have the option, for a period of 30 days from the date of this prospectus, to purchase up to 2,250,000 additional shares of common stock from the selling stockholders. We will not receive any proceeds from the sale of our common stock by the selling stockholders pursuant to any exercise of the underwriters’ option to purchase additional shares.
The underwriters expect to deliver the shares against payment in New York, New York on or about                , 2021.
 
 
 
Barclays
 
BofA Securities
 
Citigroup
 
Evercore ISI
 
Jefferies
 
RBC Capital Markets
 
Stifel
 
HSBC
 
Citizens Capital Markets
 
KKR
 
MUFG
 
Loop
Capital Markets
 
R. Seelaus & Co., LLC
 
Ramirez &
Co., Inc.
 
Roberts & Ryan
                    , 2021

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First Advantage

Table of Contents
30K Customers in 2020 75M Screens in 2020 600+ Integrated and/or Automated Data Providers 600M+ Records in Proprietary Databases 70+ Human Capital Management Software Integrations

Table of Contents
TABLE OF CONTENTS
 
    
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     174  
     F-1  
 
 
You should rely only on the information contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. None of us, the selling stockholders or the underwriters have authorized anyone to provide you with different information. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus, or any free writing prospectus, as the case may be, or any sale of shares of our common stock.
For investors outside the United States: the selling stockholders and the underwriters are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. None of us, the selling stockholders or the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus outside the United States.
 
i

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INDUSTRY AND MARKET DATA
This prospectus contains information and statistics that we have obtained from various independent third-party sources, including independent industry publications, reports by market research firms, and other independent sources. This prospectus also contains information from a survey commissioned by us and conducted by Stax Inc. (“Stax”), a global management consulting firm, in March 2021 to provide information on our market. Certain data and other information contained in this prospectus, including information with respect to our market position, are also based on management’s estimates and calculations, which are derived from our review and interpretation of internal surveys and third-party sources. Data regarding the industries in which we compete and our market position and market share within these industries are inherently imprecise, require the making of certain assumptions and are subject to significant business, economic and competitive uncertainties beyond our control, but we believe they generally indicate size, position and market share within these industries. Statements regarding the Company’s leading position are based on market share as calculated by revenue. While we believe such information is reliable, we have not independently verified any third-party information and our internal data has not been verified by any independent source. While we believe our internal company research and estimates are reliable, such research and estimates have not been verified by any independent source. In addition, assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Forward-Looking Statements.” As a result, you should be aware that market, ranking, and other similar industry data included in this prospectus, and estimates and beliefs based on that data may not be reliable. None of us, the selling stockholders and the underwriters can guarantee the accuracy or completeness of any such information contained in this prospectus.
TRADEMARKS, SERVICE MARKS, AND TRADENAMES
We own a number of registered and common law trademarks and pending applications for trademark registrations in the United States and other countries, including, for example: First Advantage, Profile Advantage, Enterprise Advantage, Insight Advantage, Verified!, HEAL, RoadReady, and Residential Advantage, among others. Unless otherwise indicated, all trademarks, tradenames, and service marks appearing in this prospectus are proprietary to us, our affiliates, and/or licensors. This prospectus also contains trademarks, tradenames, and service marks of other companies, which are the property of their respective owners. Solely for convenience, the trademarks, tradenames, and service marks referred to in this prospectus may appear without the ® and
TM
symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, tradenames, and service marks. We do not intend our use or display of other parties’ trademarks, tradenames, or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.
BASIS OF PRESENTATION
The following terms are used in this prospectus unless otherwise noted or indicated by the context:
 
   
“Enterprise customers” means our customers who contribute $500,000 or more to our revenues in a calendar year;
 
   
“First Advantage,” the “Company,” “we,” “us,” and “our” mean the business of First Advantage Corporation and its subsidiaries;
 
   
“Follow-On
Offering” means the sale of 15,000,000 shares of common stock by selling stockholders in this offering;
 
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“gross retention rate” for the current year is a percentage, where the numerator is prior year revenues less the revenue impact of lost accounts; the denominator is prior year revenues. We calculate the revenue impact of lost accounts as the difference between the customer’s current year and prior year revenues for the months after which they are identified as lost. Therefore, the attrition impact of customers lost in the current year may be partially captured in both the current and following years’ retention rates depending on what point during the year they are lost. Our retention rate does not factor in revenue impact, whether growth or decline, attributable to existing customers or the incremental revenue impact of new customers;
 
   
“IPO” means the initial public offering of our common stock, which closed on June 25, 2021;
 
   
“IPO Transactions” refers to the sale by the Company of 22,856,250 shares of common stock in the IPO at the initial public offering price of $15.00 per share for aggregate net proceeds of $316.5 million (after deducting the underwriting discounts and commissions and estimated offering expenses payable by the Company in connection therewith) and the application of the net proceeds to repay $200.0 million of borrowings under its term loan facility and the remainder for general corporate purposes;
 
   
“pro forma” or “pro forma basis” means (i) giving effect to the Transactions with respect to the year ended December 31, 2020 and the nine months ended September 30, 2020 and (ii) giving effect to the IPO Transactions, this
Follow-On
Offering, and the SLP Distribution with respect to the nine months ended September 30, 2021, in each case, as further described in “Unaudited Pro Forma Consolidated Financial Information”;
 
   
“Silver Lake” or “Sponsor” means Silver Lake Group, L.L.C., together with its affiliated entities, successors and assignees;
 
   
“SLP Distribution” means the in-kind distribution of 4,659,403 shares of our common stock held by SLP Fastball Aggregator, L.P. to its direct and indirect equityholders (or 5,358,537 shares if the underwriters’ option to purchase additional shares of our common stock is exercised in full). The number of shares to be distributed is based upon an assumed offering price of $21.05 per share, which is the closing sales price of our common stock as reported on Nasdaq on November 5, 2021, less estimated underwriters’ discounts and commissions. The SLP Distribution is expected to occur following the closing of this Follow-On Offering. A $1.00 increase or decrease in the assumed offering price would result in an increase of 76,674 shares or a decrease of 86,386 shares, respectively, of our common stock to be distributed in the SLP Distribution; and
 
   
“Transactions” refers, collectively, to (i) the Silver Lake Transaction (as further described below); (ii) the Silver Lake Transaction Refinancing (as described in “Unaudited Pro Forma Consolidated Financial Information”); (iii) the IPO Transactions, (iv) this
Follow-On
Offering, and (v) the SLP Distribution.
On January 31, 2020, Silver Lake acquired substantially all of the equity interests of the Company from Symphony Technology Group (“STG”) pursuant to an Agreement and Plan of Merger, dated as of November 19, 2019 (the “Silver Lake Transaction”). For the purposes of the consolidated financial data included in this prospectus, periods on or prior to January 31, 2020 reflect the financial position, results of operations, and cash flows of the Company and its consolidated subsidiaries prior to the Silver Lake Transaction, referred to herein as the Predecessor, and periods beginning after January 31, 2020 reflect the financial position, results of operations and cash flows of the Company and its consolidated subsidiaries as a result of the Silver Lake Transaction, referred to herein as the Successor. As a result of the Silver Lake Transaction, the results of operations and financial position of the Predecessor and Successor are not directly comparable.
Numerical figures included in this prospectus have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.
 
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NON-GAAP
FINANCIAL MEASURES
This prospectus contains
“non-GAAP
financial measures” that are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”).
We believe Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted Earnings Per Share are useful in evaluating our operating performance. Management believes these
non-GAAP
measures are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. Management uses these measures to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation, and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with
non-GAAP
financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone.
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted Earnings Per Share are not recognized terms under GAAP and should not be considered as an alternative to net income (loss) or earnings per share as a measure of financial performance or any other performance measure derived in accordance with GAAP. The presentations of these measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.
For a discussion of the use of these measures and a reconciliation of the most directly comparable GAAP measures, see “Summary—Summary Historical and Pro Forma Consolidated Financial and Other Data.”
 
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SUMMARY
This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before deciding to invest in our common stock. You should read the entire prospectus carefully, including “Risk Factors” and our consolidated financial statements and related notes included elsewhere in this prospectus, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties.
Our Company
First Advantage is a leading global provider of technology solutions for screening, verifications, safety, and compliance related to human capital. We deliver innovative solutions and insights that help our customers manage risk and hire the best talent. Enabled by our proprietary technology platform, our products and solutions help companies protect their brands and provide safer environments for their customers and their most important resources: employees, contractors, contingent workers, tenants, and drivers.
We manage one of the earliest and most important interactions between an applicant and our customer. Indeed, most applicants view their screening experience as a reflection of the hiring organization and its overall onboarding process. Our comprehensive product suite includes Criminal Background Checks, Drug / Health Screening, Extended Workforce Screening, Biometrics & Identity, Education / Work Verifications, Resident Screening, Fleet / Driver Compliance, Executive Screening, Data Analytics, Continuous Monitoring, Social Media Monitoring, and Hiring Tax Incentives. We derive a substantial majority of our revenues from
pre-onboarding
screening and perform screening in over 200 countries and territories, enabling us to serve as a
one-stop-shop
provider to both multinational companies and growth companies. In 2020, we performed over 75 million screens on behalf of more than 30,000 customers spanning the globe and all major industry verticals. We often have multiple constituents within our customers, including Executive Management, Human Resources, Talent Acquisition, Compliance, Risk, Legal, Safety, and Vendor Management, who rely on our products and solutions.
Our long-standing, blue-chip customer relationships include five of the U.S.’s top ten private sector employers, 55% of the Fortune 100, and approximately
one-third
of the Fortune 500. We have successfully gained market share by focusing on fast-growing industries and companies, increasing our share with existing customers, upselling and cross-selling new products and solutions, and winning new customers.
Our verticalized
go-to-market
strategy delivers highly relevant solutions for various industry sectors. This approach enables us to build a diversified customer portfolio and effectively serve many of the largest, most sophisticated, and fastest-growing companies in the world. We have built a powerful and efficient customer-centric sales model fueled by frequent engagement with our customers and deep subject matter expertise in industry-specific compliance and regulatory requirements, which allows us to create tailored solutions and drive consistent upsell and cross-sell opportunities. Our sales engine is powered by over 100 dedicated Sales and Solutions Engineering professionals working alongside over 200 dedicated Customer Success team members who have successfully maintained high customer satisfaction, retention, and growth, as evidenced by our industry-leading net promoter score (“NPS”), average
12-year
tenure of our top 100 customers, and gross retention rate of approximately 95%, before factoring in growth or decline from existing or new customers. Our
go-to-market
strategy continues to drive particular strength with Enterprise customers in sectors with attractive secular trends such as
e-commerce,
essential retail, transportation and home delivery, warehousing, healthcare, technology, and staffing.
We have designed our technology platform to be highly configurable, scalable, and extensible. Our platform is embedded in our customers’ core enterprise workflows and interfaces with more than 70 third-party Human

 
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Capital Management (“HCM”) software platforms, including Applicant Tracking Systems (“ATS”), providing us with real-time visibility and input into our customers’ human resources processes. We leverage our proprietary databases—which include more than 600 million criminal and work history observations as of September 30, 2021—and an extensive and highly curated network of more than 600 automated and/or integrated third-party data providers. These data providers include federal, state, and local government entities; court runners; drug and health testing labs and collection sites; credit bureaus; and education and work history verification providers. Our platform efficiently and intelligently integrates data from these proprietary internal databases as well as external data sources using automation, APIs, and machine learning. Our investments in robotic process automation (“RPA”), including more than 2,750 bots currently deployed, enable our rapid turnaround times. For example, in 2020 alone, our technology innovations drove a 10% improvement in average turnaround time for our criminal searches in the United States. Our platform prioritizes data privacy and compliance and is powered by a rigorous, automated compliance rules engine. This enables us to address each customer’s unique requirements in an efficient and automated manner while also ensuring compliance with complex data usage guidelines and regulatory requirements across global jurisdictions, industry-specific regulatory frameworks, and use cases.
Our focus on innovative products and technologies has been critical to our growth. Using agile software development methodologies, we have consistently enhanced existing products and been early to market with new and innovative products, including offerings for biometrics and identity, continuous criminal monitoring, driver onboarding, extended workforce screening, instant oral drug testing, and virtual drug testing. In addition, we continue to expand our proprietary databases that extend our competitive advantage, enhance turnaround times for customers, and offer potential future monetization upside opportunities. Our proprietary databases consist of hundreds of millions of criminal, education, and work history records. These strategic assets amassed and curated over the course of many years improve screening turnaround times and significantly reduce costs by using our internal data sources before accessing third-party data sources.
We have a strong track record of increasing market share, growing revenues, and expanding profit margins in recent years:
 
   
Our large, Enterprise customers have increased from 122 companies at the beginning of 2018 to 141 at the end of 2020.
 
   
From 2018 to 2020 and despite the impact of
COVID-19
on the macroeconomic environment, our revenues grew at a compound annual growth rate (“CAGR”) of 7%, all of which was organic growth from new customer wins or growth within our existing customer base. Our gross retention rate averaged approximately 95% over those three years.
 
   
We generated net income of $34 million for the year ended December 31, 2019, and a net loss of $(62) million for the year ended December 31, 2020, on a pro forma basis. We generated a net loss of $(59) million for the nine months ended September 30, 2020 and net income of $5 million for the nine months ended September 30, 2021, in each case, on a pro forma basis.
 
   
Our Adjusted EBITDA was $124 million for the year ended December 31, 2019. Our Adjusted EBITDA for the year ended December 31, 2020, on a pro forma basis, was $147 million. Our Adjusted EBITDA was $102 million for the nine months ended September 30, 2020 and $157 million for the nine months ended September 30, 2021, in each case, on a pro forma basis.
 
   
Driven by scale, automation, and operational discipline, our Adjusted EBITDA Margins expanded, resulting in an Adjusted EBITDA CAGR of 21% from 2018 to 2020, on a pro forma basis.
For more information about how we calculate Adjusted EBITDA, please see footnote (1) in “—Summary Historical and Pro Forma Consolidated Financial and Other Data—Adjusted EBITDA.”
Our Market Opportunity
The importance of human capital and its associated risks to brand, reputation, safety, and compliance are ever-increasing in today’s interconnected, fast-paced world. Along with broader environmental, social, and
 
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governance (“ESG”) considerations, these issues increasingly have become priorities at the highest executive and oversight levels of our customers worldwide. Key constituents, including
C-Suite
executives, boards of directors, external auditors, business owners, property managers, educators, volunteer organizations, and franchisors all face a heightened level of public scrutiny and accountability. Significant technological and societal trends include fraud and cyber-attacks; sexual harassment and workplace violence; and the prevalence of social media impacting companies’ brands. These have driven a significant increase in the need for screening, verifications, and ongoing monitoring. Our products and solutions have become critical tools that companies depend on to provide safe environments for their customers and workers, maintain regulatory compliance, and protect their property, reputation, and brands.
According to Stax, a global management consulting firm, the global Total Addressable Market (“TAM”) for our current products and solutions is approximately $13 billion. This includes $6 billion of current market spend and $7 billion of whitespace attributable to products and solutions that may ultimately be adopted across geographies. The estimated TAM includes a $5 billion market opportunity for U.S.
pre-onboarding
screening; a $4 billion market for U.S. post-onboarding monitoring, resident screening, hiring tax credits, and fleet / vehicle solutions; and a $4 billion market for international
pre-onboarding
screening and post-onboarding monitoring. In addition, according to Stax, current market spend will grow at a long-term CAGR of 6%, fueled by increases in hiring and job churn, growing attachment rates for existing products, accelerating adoption of post-onboarding and adjacent products in the U.S., and growing overall adoption in underpenetrated international markets. Our market is also fragmented, with the top three background screening providers constituting only
one-third
of the market according to Stax, providing ample opportunities for us to continue to increase market share.
We believe several key trends are generating significant growth opportunities in our markets and increasing demand for our products and solutions:
 
   
Increased Workforce Mobility and Job Turnover:
Millennials represented over
one-third
of the U.S. workforce in 2020 and are three times as likely to change jobs as other generations in pursuit of earning higher wages, faster career development, and better workplace culture fit. In addition, as the economy evolves and resource needs differ significantly by sector, geography, and skill set, this is driving dynamism in the hiring environment.
 
   
Increasing Use of Contingent and Flexible Workforces:
Approximately
25-30%
of the U.S. workforce are contingent workers, including freelancers, independent contractors, consultants, or other outsourced and
non-permanent
workers, and a majority of large corporations plan to substantially increase their use of a flexible workforce. When independent contractors, external consultants, and temporary workers have access to sensitive information, company facilities, or directly interact with customers, it is important for companies to screen such flexible workforce personnel diligently.
 
   
C-Suite
Focus on Safety and Reputational Risks:
Screening, verifications, and compliance are mission-critical and are becoming boardroom priorities for many companies due to the brand risks and potential legal liability of hiring high-risk workers. A number of high-profile human capital-related issues have led to significant brand damage, diversion of management attention, litigation, and negative news and social media coverage for enterprises in recent years. These events reinforced the importance of our products and solutions. According to a fact sheet from the Occupational Safety and Health Administration, approximately two million American workers are victims of workplace violence each year. Companies are increasingly expanding human resources and compliance budgets on products and solutions that help manage their potential risks and improve safety. By enhancing workplace safety, we address important social factors affecting our customers.
 
   
Heightened Regulatory and Compliance Scrutiny:
Businesses today are under intense scrutiny to comply with an ever-expanding and evolving set of global regulatory requirements that can vary by geography, industry vertical, and use case. Examples include the Foreign Corrupt Practices Act

 
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(“FCPA”), the United Kingdom Bribery Act, Fair Credit Reporting Act (“FCRA”), California Consumer Privacy Act (“CCPA”), E.U. General Data Protection Regulation (“GDPR”), the United Kingdom General Data Protection Regulation (“U.K. GDPR”), and Illinois Biometric Information Privacy Act (“IBIPA”), in addition to other anti-corruption requirements with respect to anti-money laundering and politically exposed persons. These requirements are driving many companies to perform more extensive and exhaustive checks and to partner with screening providers that have the scale, scope, heightened compliance standards, and auditability that they require. Our products and solutions help strengthen companies’ corporate governance through bolstering their compliance and risk management practices.
 
   
Growth in Post-Onboarding Monitoring:
Companies are increasingly expanding their screening programs beyond a
“one-and-done”
pre-onboarding
measure, which has historically been the norm in markets like the U.S. and U.K. We have invested in and continue to innovate our post-onboarding products and solutions and believe we are well-positioned to capture share in this growing market.
 
   
Development of International Markets:
Background screening penetration remains low in most international geographies, with a large portion of screens conducted by unsophisticated, local providers. Multinational companies are increasingly focused on systematizing and elevating their human resources policies, screening procedures, and providers globally, driving greater demand and a shift towards high-quality, compliant, and global screening providers. In addition, many
non-U.S.-based
companies are initiating screening programs for the first time and are seeking reliable, compliant, and high quality providers.
 
   
Investment in Enterprise Software:
Companies are increasingly investing in enterprise software to manage their businesses, including next-generation
software-as-a-service
solutions for Human Capital Management (“HCM”). As companies implement these systems, we believe there will be an increase in demand for screening, verification, and compliance solutions that can interface with these systems in an automated fashion to provide a seamless applicant and user experience and insights based on data analytics.
 
   
Proliferation of Relevant Data Sources:
U.S. government agencies, third-party vendors, and professional organizations are increasingly tracking and improving the quality and digitization of data in areas such as criminal, education, income history, healthcare credentials, and motor vehicle records (“MVRs”). In many other countries with limited quality and availability of reliable data, the collection, and organization of higher quality datasets has been increasing. This increasing availability of data is driving customers to rely on large-scale, sophisticated providers that can efficiently access and create insights from data sourced, aggregated, and integrated from myriad disparate sources.
 
   
Advances in Analytics to Increase Value of Data:
The increasing accessibility of robust datasets supplemented by machine learning technologies is driving heightened focus on integrating screening insights and dashboards with human resources, compliance, and security workflows. Customers often lack internal resources to develop such analytical and visualization tools, increasing demand for providers that offer these cutting-edge integrated data analytics capabilities.
Our Competitive Strengths
We believe the following competitive strengths have been instrumental in our success and position us for future growth:
 
   
Market Leadership Built on Outstanding Customer Experience.
We believe our relentless customer focus, comprehensive
end-to-end
product suite, advanced technology platform, proprietary databases, and intuitive consumer feel of our applications allow us to provide a differentiated value proposition and have been instrumental in establishing our market leadership. The strength of our value proposition

 
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and customer relationships are evidenced by our approximately 95% average gross retention rate from 2018 to 2020, our industry-leading NPS, and the average
12-year
tenure of our top 100 customers.
 
   
Verticalized
Go-to-Market
Engine and Products.
Our Sales and Customer Success teams are organized by industry vertical with extensive subject-matter expertise. A deep understanding of industry-specific issues enables our Sales and Customer Success teams to upsell and cross-sell relevant products and drives rapid development of value-added, industry-specific solutions. Customer Advisory Boards, standardized customer reviews, product showcases, and continuous feedback loops across Sales, Customer Success, Product, and other functional areas, enable us to identify quickly, develop, and launch new products and solutions. We have intentionally designed our technology platform to be highly flexible, allowing our customers to configure our solutions to meet their unique requirements. For example, our home delivery companies can draw upon a tailored suite of products, including motor vehicle records monitoring, Department of Transportation (“DOT”) compliance checks, and fleet management products. We have deliberately built competencies around industry verticals that we believe are well-positioned for long-term growth, including
e-commerce,
essential retail, transportation and home delivery, warehousing, healthcare, technology, and staffing.
 
   
Leading Technology
 & Analytics Drive Customer Value Proposition
. Our strategic investments in technologies such as robotic process automation, artificial intelligence, facial recognition, and machine learning enable us to deliver superior risk management solutions with excellent speed, accuracy, and value to our customers. Our full product suite is available on our core platform, Enterprise Advantage, which can handle large-scale order volumes with an average of 99.9% uptime. Our
AI-powered
applicant experience, Profile Advantage, offers an intuitive user interface with chatbots, digital camera-enabled document uploads, and embedded machine learning to reduce missing information dramatically and compress the timeframe of the entire application process. Since Profile Advantage manages a critical interaction between our customers and their applicants, we offer our customers the option to white-label the product as an extension of their own brand, enhancing applicant engagement and satisfaction during the onboarding process. We also deliver value to customers through robust analytics solutions that allow them to aggregate, analyze, and act on recruitment and screening data in real-time. This allows our customers to derive actionable insights and make critical and informed decisions to improve the performance of their organization’s recruitment, onboarding, safety, and screening programs.
 
   
Product and Compliance Strength Across Geographies
. Our global presence allows us to meet the demands of multinational customers that operate in a variety of complex regulatory and compliance regimes, such as FCRA, GDPR, DOT, data privacy regulatory changes, country-specific labor laws, and
right-to-work
laws. The highly fragmented international screening market historically has resulted in companies relying on multiple providers across geographies, making it difficult for them to ensure consistent and compliant global workforce standards. We have built differentiated product depth, compliance expertise, and geographic coverage, which allow our customers to unify screening programs across 200 countries and territories. In addition, we are also one of the best-suited partners to help U.S. businesses screen candidates with international backgrounds, given our access to data and ability to perform verifications internationally. Our customers turn to us as an important partner in ensuring strong corporate governance across their geographies.
 
   
Technology-Driven Operational Excellence and Profitability
. Our technology drives significant operating efficiencies by leveraging automation and
end-to-end
integrations that enable us to achieve the highest customer satisfaction for quality, accuracy, and turnaround time performance, which are customers’ top provider selection criteria, while maintaining strong margins. Our user-facing
front-end
technology creates a superior applicant experience. Our
back-end
technology drives operational excellence, with more than 2,750 active intelligent bots yielding significant improvements in speed, accuracy, and cost savings. The intelligent bots have enabled us to improve the average turnaround
 
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time for criminal searches in the U.S. by over 10% from 2019 to 2020. Driven by these efficiency gains, we achieved more than 600 basis points of Adjusted EBITDA Margin expansion from 2018 to 2020. We expect our investments in technology and automation will help drive further improvement in our long-term margin profile.
 
   
Experienced and Visionary Management Team with Complementary Skills.
Our entrepreneurial and cohesive executive team is the driving force behind our success. Our management team has driven our recent success with extensive leadership experience in risk, compliance, software, technology, and information services and outstanding cross-functional coordination abilities through both operational discipline and executing on its strategic vision. Our current management team has led our company since 2017 and in that time has driven strategic and transformational initiatives across operations, product, engineering, and sales to accelerate growth and product development. We believe our team has the strategic vision, leadership qualities, technological expertise, and operational capabilities to continue to successfully drive our growth.
Our Growth Strategy
We intend to continue to grow our business profitably by pursuing the following strategies:
 
   
Continue to Win New Customers.
We are focused on winning new customers across industry verticals, particularly those with attractive, long-term hiring outlooks such as
e-commerce,
essential retail, and transportation and home delivery, and sectors that are increasingly requiring deeper, more frequent checks with high compliance standards such as healthcare and technology. We are also prioritizing new verticals that align with positive secular macroeconomic trends. We primarily focus on large Enterprise customers, which we believe are well-positioned for durable, long-term growth, have complex and diverse global operations, and, as a result, have the highest demand for our products and solutions. We believe our innovative and differentiated solutions, high-performing Sales and Customer Success teams, operational excellence, and industry-leading reputation and brand will enable us to expand our customer base successfully.
 
   
Growth within Our Existing Customer Base through Upselling and Cross-selling.
Our customers frequently begin their relationship with us by implementing a few core products and subsequently expanding their usage of our solutions platform over time to build a more comprehensive approach to screening and risk management. We drive upsell as customers extend our products and solutions to new divisions and geographies, perform more extensive screens, and purchase additional complementary
pre-onboarding
products. We also cross-sell additional risk mitigation and compliance solutions such as post-onboarding screening, hiring tax credits, and fleet solutions. Our Sales and Customer Success teams frequently engage with our existing customers and identify areas where we can provide additional value and products. Our deeply entrenched, dedicated Customer Success teams work closely with our customers to develop robust and rigorous compliance and risk management programs within their organizations. We believe that our total revenue opportunity with current customers is twice the size of our current revenue base when taking into account cross-selling and upselling opportunities. Revenues from cross-sell and upsell added approximately 5 and 4 percentage points to our revenue growth rate in 2019 and 2020, respectively. We will continue to hone our sales and marketing engine to increase product penetration within our existing customer base.
 
   
Continue to Innovate Our Product Offerings.
We plan to continue to expand our post-onboarding and adjacent product revenues. For example, we are currently investing in sources of recurring and subscription-based revenues such as post-onboarding monitoring solutions, software licensing, and data analytics. In addition, we are developing innovative solutions that align with our capabilities in areas such as biometric and identity verification, fraud mitigation, driver and vehicle compliance, franchise screening programs, virtual drug testing, and contingent worker screening. We will continue to invest significantly in our technology to sustain and advance our product leadership.
 
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Expand Internationally.
We believe we are well-positioned to continue to expand into underpenetrated, high-growth international geographies. As multinational corporations increasingly systematize and elevate their human resources policies and screening providers across the globe while at the same time dealing with a growing set of local requirements, we believe we are uniquely positioned to address their global risk management and compliance requirements. The substantial majority of Enterprise customers do not currently have a single, global provider but are actively evaluating opportunities to consolidate their screening programs. We plan to continue to invest in international Sales and Customer Success to win these expansion opportunities and drive broader industry adoption.
 
   
Selectively Pursue Complementary Acquisitions and Strategic Partnerships.
Our acquisition and partnership strategy centers on delivering additional value to our customers through expanded product capabilities and industry or geographic expertise and scale. For example, in March 2021 we acquired GB Group’s screening business in the U.K., which established First Advantage as one of the largest screening providers for U.K.-based companies and organizations. We intend to augment our organic growth by continuing to take a disciplined approach in identifying and evaluating potential strategic acquisition, investment, and partnership opportunities that strengthen our market positions, enhance our product offerings, strengthen our data capabilities, and/or allow us to enter new markets.
Risks Related to Our Business and this Offering
Investing in our stock involves a high degree of risk. You should carefully consider the risks described in “Risk Factors” before making a decision to invest in our common stock. If any of these risks actually occurs, our business, results of operations, and financial condition may be materially adversely affected. In such case, the trading price of our common stock may decline and you may lose part or all of your investment. Below is a summary of some of the principal risks we face:
 
   
The impact of
COVID-19
and related risks could materially affect our results of operations, financial position, and/or liquidity.
 
   
We operate in a highly regulated industry and are subject to numerous and evolving laws and regulations, including those relating to consumer protection, intellectual property, cybersecurity, and data privacy, among others.
 
   
We rely on a variety of third-party data providers, and if our relationships with any of them deteriorate, or if they are unable to deliver or perform as expected, our ability to operate effectively may be impaired, and our business may be materially and adversely affected.
 
   
Negative changes in external events beyond our control, including our customers’ onboarding volumes, economic drivers which are sensitive to macroeconomic cycles, and the
COVID-19
pandemic, could adversely affect us.
 
   
Our business, brand, and reputation may be harmed as a result of security breaches, cyber-attacks, or the mishandling of personal data.
 
   
Our business depends on the continued integration of our platforms and solutions with human resource providers such as applicant tracking systems and human capital management systems, as well as our relationships with such human resource providers.
 
   
Disruptions, outages, or other errors with our technology and network infrastructure, including our data centers, servers, and third-party cloud and internet providers, and our migration to the cloud, could have a materially adverse effect on our business.

 
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If we are unable to obtain, maintain, protect, and enforce our intellectual property and other proprietary information, or if we infringe, misappropriate, or otherwise violate the intellectual property rights of others, the value of our brands and other intangible assets may be diminished, and our business may be adversely affected.
 
   
Our indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and prevent us from meeting our obligations. As of September 30, 2021, we had $564.7 million of total debt outstanding and $100.0 million available under our revolving credit facility.
 
   
Our Sponsor controls us and its interests may conflict with yours in the future.
Implications of being an Emerging Growth Company
We qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act. As a result, we are permitted to, and are relying on, exemptions from certain disclosure requirements that are applicable to other companies that are not emerging growth companies. Accordingly, in this prospectus, we have (i) presented only two years of audited consolidated financial statements; and (ii) have not included a compensation discussion and analysis of our executive compensation programs. In addition, for so long as we are an emerging growth company, among other exemptions, we will not be required to:
 
   
engage an independent registered public accounting firm to report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);
 
   
disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation; or
 
   
submit certain executive compensation matters to stockholder advisory votes, such as
“say-on-pay,”
“say-on-frequency”
and
“say-on-golden
parachutes.”
We will remain an emerging growth company until the earliest to occur of:
 
   
our reporting of $1.07 billion or more in annual gross revenue;
 
   
our becoming a “large accelerated filer,” with at least $700 million of equity securities held by
non-affiliates;
 
   
our issuance, in any three year period, of more than $1.0 billion in
non-convertible
debt; and
 
   
the fiscal year commencing on January 1, 2027.
The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), also permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to use this extended transition period under the JOBS Act, and as a result, our financial statements may not be comparable with similarly situated public companies.
Our Sponsor
Silver Lake is a global technology investment firm, with more than $88 billion in combined assets under management and committed capital and a team of professionals based in North America, Europe and Asia. Silver Lake devotes its full scope of talent and intellectual capital to the singular mission of investing in the world’s leading technology companies and tech-enabled businesses. Founded in 1999, Silver Lake leverages the deep knowledge and expertise of a global team based in Menlo Park, Cupertino, New York, London, and Hong Kong.

 
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Our Corporate Information
Our common stock began trading on Nasdaq under the symbol “FA” on June 23, 2021 and we consummated the IPO on June 25, 2021.
We began our operations in 2003. First Advantage Corporation was incorporated in Delaware on November 15, 2019 in connection with the Silver Lake Transaction. Our principal offices are located at 1 Concourse Parkway NE, Suite 200, Atlanta, Georgia 30328. Our telephone number is
(888)-314-9761.
We maintain a website at www.fadv.com. The reference to our website is intended to be an inactive textual reference only. The information contained on, or that can be accessed through, our website is not part of this prospectus.

 
9

Table of Contents
The Offering
 
Issuer
First Advantage Corporation
 
Common stock offered by the selling stockholders
15,000,000 shares
 
Option to purchase additional shares of common stock
The selling stockholders have granted the underwriters a
30-day
option from the date of this prospectus to purchase up to 2,250,000 additional shares of our common stock at the public offering price, less underwriting discounts and commissions.
 
Common stock outstanding
152,875,076 shares as of November 5, 2021.
 
Use of proceeds
We will not be selling any shares in this offering and we will not receive any proceeds from the sale of shares being sold in this offering, including from any exercise by the underwriters of their option to purchase additional shares from the selling stockholders. The selling stockholders will receive all of the net proceeds and bear all commissions and discounts from the sale of our common stock by the selling stockholders. See “Principal and Selling Stockholders.”
 
Dividend policy
We have no current plans to pay dividends on our common stock. Any decision to declare and pay dividends in the future will be made at the sole discretion of our board of directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions, including restrictions in the agreements governing our indebtedness, and other factors that our board of directors may deem relevant. See “Dividend Policy.”
 
Risk factors
Investing in shares of our common stock involves a high degree of risk. See “Risk Factors” for a discussion of factors you should carefully consider before investing in shares of our common stock.
 
Trading symbol
    
“FA”
Unless we indicate otherwise or the context otherwise requires, this prospectus:
 
   
reflects and assumes no exercise of the underwriters’ option to purchase additional shares of our common stock;
 
   
does not reflect 12,864,126 shares of common stock reserved for future issuance pursuant to our First Advantage Corporation 2021 Omnibus Incentive Plan (the “2021 Equity Plan”) and First Advantage Corporation 2021 Employee Stock Purchase Plan (the “ESPP”). As of the date of this prospectus, pursuant to the 2021 Equity Plan, we have issued 3,222,790 options, 2,918,084 shares of restricted stock and 45,000 restricted stock units, which remain outstanding. Additionally, we have 3,476,665 options outstanding under our legacy equity incentive plan. See “Management—Executive Compensation—Long-Term Equity Incentive Compensation”; and
 
   
reflects the SLP Distribution, which refers to the in-kind distribution of 4,659,403 shares of our common stock held by SLP Fastball Aggregator, L.P. to its partners. The number of shares to be

 
10

Table of Contents
 
distributed is based upon an assumed offering price of $21.05 per share, which is the closing sales price of our common stock as reported on Nasdaq on November 5, 2021, less estimated underwriters’ discounts and commissions. The SLP Distribution is expected to occur following the closing of this Follow-On Offering. A $1.00 increase or decrease in the assumed offering price would result in an increase of 76,674 shares or a decrease of 86,386 shares, respectively, of our common stock to be distributed in the SLP Distribution; and
 
   
does not reflect any additional in-kind distributions of up to 699,134 shares of our common stock held by SLP Fastball Aggregator, L.P. that it may choose to effect in the event that the underwriters’ option to purchase additional shares of our common stock is exercised in full. The number of shares to be distributed is based upon an assumed offering price of $21.05 per share, which is the closing sales price of our common stock as reported on Nasdaq on November 5, 2021, less estimated underwriters’ discounts and commissions.
 
11

Table of Contents
SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL AND OTHER DATA
Set forth below is our summary historical consolidated financial and other data as of the dates and for the periods indicated. The summary historical financial data as of December 31, 2019 (Predecessor) and December 31, 2020 (Successor) and for the year ended December 31, 2019 (Predecessor), for the period from January 1 through January 31, 2020 (Predecessor), and for the period from February 1 through December 31, 2020 (Successor) has been derived from our audited historical consolidated financial statements included elsewhere in this prospectus. The summary historical financial data as of September 30, 2021 (Successor) and for the period from February 1, 2020 through September 30, 2020 (Successor) and for the nine months ended September 30, 2021 (Successor) has been derived from our unaudited historical consolidated financial statements included elsewhere in this prospectus. The unaudited historical consolidated financial statements were prepared on a basis consistent with our audited historical consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair statement of the financial information. The results for any interim period are not necessarily indicative of the results that may be expected for the full year. In addition, the results of operations for any period are not necessarily indicative of the results to be expected for any future period.
On January 31, 2020, the Sponsor acquired substantially all of the equity interests in the Company from STG, pursuant to the Silver Lake Transaction. For the purposes of the consolidated financial data included in this prospectus, periods on or prior to January 31, 2020 reflect the financial position, results of operations, and cash flows of the Company and its consolidated subsidiaries prior to the Silver Lake Transaction, referred to herein as the Predecessor, and periods beginning after January 31, 2020 reflect the financial position, results of operations and cash flows of the Company and its consolidated subsidiaries as a result of the Silver Lake Transaction, referred to herein as the Successor. As a result of the Silver Lake Transaction, the results of operations and financial position of the Predecessor and Successor are not directly comparable.
The summary unaudited pro forma consolidated financial data presented below has been derived from our unaudited pro forma consolidated financial statements included elsewhere in this prospectus. The summary unaudited pro forma consolidated statement of operations data for the year ended December 31, 2020 and the nine months ended September 30, 2020 give effect to the Transactions as if they had occurred on January 1, 2020. The unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2021 gives effect to the IPO Transactions, this
Follow-On
Offering, and the SLP Distribution as if they had occurred on January 1, 2020. The unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2021 does not give effect to either the Silver Lake Transaction or the Silver Lake Transaction Refinancing as if they had occurred on January 1, 2020 because these events are already reflected for the full period presented in the historical statement of operations of the Company. The unaudited pro forma financial information includes various estimates which are subject to material change and may not be indicative of what our operations would have been had such transactions taken place on the dates indicated, or that may be expected to occur in the future. See “Unaudited Pro Forma Consolidated Financial Information” for a complete description of the adjustments and assumptions underlying the summary unaudited pro forma consolidated financial data. The unaudited pro forma consolidated financial data is included for information purposes only.
You should read the following summary financial and other data below together with the information under “Unaudited Pro Forma Consolidated Financial Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements and related notes thereto and our unaudited consolidated financial statements and related notes thereto, each included elsewhere in this prospectus.

 
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Table of Contents
   
Annual Periods
   
Interim Periods
       
   
Predecessor
        
Successor
   
Predecessor
         
Successor
   
Pro Forma
 
   
Year Ended
December 31,
   
Period from
January 1
through
January 31,
        
Period from
February 1
through
December 31,
   
Period from
January 1
through
January 31,
         
Period from
February 1,
2020 through
September 30,
   
Nine
Months
Ended
September 30,
   
Year Ended
December 31,
   
Nine
Months
Ended
September 30,
   
Nine
Months
Ended
September 30,
 
   
2019
   
2020
        
2020
   
2020
         
2020
   
2021
   
2020
   
2020
   
2021
 
(In thousands, except share
and per share amounts)
                                                                
Statement of Operations Data
     
 
     
 
         
Revenues
  $ 481,767     $ 36,785    
 
  $ 472,369     $ 36,785    
 
  $ 315,825     $ 499,763     $ 509,154     $ 352,610     $ 499,763  
   
Operating expenses
     
 
     
 
         
Cost of services
    245,324       20,265    
 
    240,287       20,265    
 
    156,703       244,964       260,613       177,012       244,968  
Product and technology expense
    33,239       3,189    
 
    32,201       3,189    
 
    20,495       33,546       35,565       23,808       33,563  
Selling, general, and administrative expense
    85,084       11,235    
 
    66,864       11,235    
 
    46,206       76,256       81,256       59,723       76,336  
Depreciation and amortization
    25,953       2,105    
 
    135,057       2,105    
 
    97,815       106,493       143,286       108,240       106,493  
Total operating expenses
    389,600       36,794    
 
    474,409       36,794    
 
    321,219       461,259       520,720       368,783       461,360  
Income (loss) from operations
    92,167       (9  
 
    (2,040     (9  
 
    (5,394     38,504       (11,566     (16,173     38,403  
   
Other expense (income)
     
 
     
 
         
Interest expense
    51,964       4,514    
 
    47,914       4,514    
 
    38,405       22,015       46,684       39,202       16,174  
Interest income
    (945     (25  
 
    (530     (25  
 
    (282     (140     (555     (307     (140
Loss on extinguishment of debt
    —         10,533    
 
    —         10,533    
 
    —         13,938       —         —         13,938  
Transaction expenses, change in control
    —         22,370    
 
    9,423       22,370    
 
    9,423       —         9,423       9,423       —    
Total other expense
    51,019       37,392    
 
    56,807       37,392    
 
    47,546       35,813       55,552       48,318       29,972  
Income (loss) before provision for income taxes
    41,148       (37,401  
 
    (58,847     (37,401  
 
    (52,940     2,691       (67,118     (64,491     8,431  
Provision for income taxes
    6,898       (871  
 
    (11,355     (871  
 
    (11,308     2,025       (4,739     (5,535     3,509  
Net income (loss)
  $ 34,250     $ (36,530  
 
  $ (47,492   $ (36,530  
 
  $ (41,632   $ 666     $ (62,379   $ (58,956   $ 4,922  
   
Net income (loss)
  $ 34,250     $ (36,530  
 
  $ (47,492   $ (36,530  
 
  $ (41,632   $ 666        
Foreign currency translation adjustments
    (341     (31  
 
    2,484       (31  
 
    (1,164     (1,594      
Comprehensive income (loss)
  $ 33,909     $ (36,561  
 
  $ (45,008   $ (36,561  
 
  $ (42,796   $ (928      
Per Share Data (unaudited)
     
 
     
 
         
Net income (loss) per share:
     
 
     
 
         
Basic
  $ 0.23     $ (0.24  
 
  $ (0.37   $ (0.24  
 
  $ (0.32   $ 0.00     $ (0.42   $ (0.39   $ 0.03  
Diluted
  $ 0.21     $ (0.24  
 
  $ (0.37   $ (0.24  
 
  $ (0.32   $ 0.00     $ (0.42   $ (0.39   $ 0.03  
Weighted average shares outstanding:
     
 
     
 
         
Basic
    149,686,460       149,686,460    
 
    130,000,000       149,686,460    
 
    130,000,000       137,232,289       149,938,166       149,938,166       149,940,131  
Diluted
    163,879,766       149,686,460    
 
    130,000,000       149,686,460    
 
    130,000,000       138,170,488       149,938,166       149,938,166       150,878,330  

 
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Table of Contents
   
Annual Periods
   
Interim Periods
       
   
Predecessor
        
Successor
   
Predecessor
         
Successor
   
Pro Forma
 
   
Year Ended
December 31,
   
Period
from
January 1
through
January 31,
        
Period from
February 1
through
December 31,
   
Period
from
January 1
through
January 31,
         
Period from
February 1,
2020 through

September 30,
   
Nine

Months
Ended
September 30,
   
Year Ended
December 31,
   
Nine

Months
Ended
September 30,
   
Nine

Months
Ended
September 30,
 
   
2019
   
2020
        
2020
   
2020
         
2020
   
2021
   
2020
   
2020
   
2021
 
(In thousands, except
share and per share
amounts)
                                                                
Balance Sheet Data (end of period)
     
 
     
 
         
Cash, cash equivalents and restricted cash
  $ 80,746      
 
  $ 152,970      
 
    $ 275,688         $ 275,688  
Total assets
  $ 544,733      
 
  $ 1,763,691      
 
    $ 1,856,693         $ 1,856,693  
Total liabilities
  $ 638,950      
 
  $ 969,421      
 
    $ 742,474         $ 742,474  
Total (deficit) equity
  $ (94,217    
 
  $ 794,270      
 
    $ 1,114,219         $ 1,114,219  
   
Cash Flow Data
     
 
     
 
         
Cash flows from operating activities
  $ 71,583     $ (19,216  
 
  $ 72,851     $ (19,216  
 
  $ 37,626     $ 83,860        
Cash flows from investing activities
  $ (17,789   $ (2,043  
 
  $ (15,569   $ (2,043  
 
  $ (10,798   $ (24,992      
Cash flows from financing activities
  $ (3,176   $ (11,122  
 
  $ 46,404     $ (11,122  
 
  $ 50,356     $ 64,372        
Capital expenditures
  $ 16,703     $ 1,880    
 
  $ 15,826     $ 1,880    
 
  $ 11,506     $ 17,709        
Purchases of property and equipment
  $ 6,578     $ 951    
 
  $ 5,304     $ 951    
 
  $ 4,083     $ 5,743        
Capitalized software development costs
  $ 10,125     $ 929    
 
  $ 10,522     $ 929    
 
  $ 7,423     $ 11,966        
   
Other Financial Data
     
 
     
 
         
Adjusted EBITDA
(1)
  $ 123,773     $ 7,022    
 
  $ 139,776     $ 7,022    
 
  $ 95,131     $ 156,856     $ 146,798     $ 102,153     $ 156,856  
Net Income (Loss) Margin
(2)
    7.1     (99.3 )%   
 
    (10.1 )%      (99.3 )%   
 
    (13.2 )%      0.1     (12.3 )%      (16.7 )%      1.0
Adjusted EBITDA Margin
(3)
    25.7     19.1  
 
    29.6     19.1  
 
    30.1     31.4     28.8     29.0     31.4
Adjusted Net Income
(4)
  $ 44,932     $ 1,371    
 
  $ 63,895     $ 1,371    
 
  $ 39,146     $ 95,869     $ 73,533     $ 47,425     $ 99,767  
Adjusted Diluted Earnings Per Share
(5)
  $ 0.27     $ 0.01    
 
  $ 0.49     $ 0.01    
 
  $ 0.30     $ 0.69     $ 0.49     $ 0.32     $ 0.66  
 
  (1)
We define Adjusted EBITDA as net income before interest, taxes, depreciation, and amortization, and as further adjusted for loss on extinguishment of debt, share-based compensation, transaction and acquisition-related charges, integration and restructuring charges, and other and
non-cash
charges. We describe these adjustments reconciling net income (loss) to Adjusted EBITDA in the table below.
 
We present Adjusted EBITDA because we believe it is a useful indicator of our operating performance. Our management uses Adjusted EBITDA principally as a measure of our operating performance and believes that Adjusted EBITDA is useful to investors because it is frequently used by analysts, investors, and other interested parties to evaluate companies in our industry. We also believe Adjusted EBITDA is useful to our management and investors as a measure of comparative operating performance from period to period.
Adjusted EBITDA is a
non-GAAP
financial measures and should not be considered as an alternative to net income (loss) as a measure of financial performance or any other performance measure derived in accordance with GAAP and it should not be construed as an inference that our future results will be unaffected by unusual or
non-recurring
items. In evaluating Adjusted EBITDA, you should be aware that in the future, we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed to imply that our future results will be unaffected by any such adjustments. Management compensates for these limitations by primarily relying on our GAAP results in addition to using Adjusted EBITDA supplementally.
 
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Table of Contents
Our Adjusted EBITDA measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
 
   
it does not reflect costs or cash outlays for capital expenditures or contractual commitments;
 
   
it does not reflect changes in, or cash requirements for, our working capital needs;
 
   
it does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;
 
   
it does not reflect period to period changes in taxes, income tax expense, or the cash necessary to pay income taxes;
 
   
it does not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations;
 
   
although depreciation and amortization are
non-cash
charges, the assets being depreciated and amortized will often have to be replaced in the future, and they do not reflect cash requirements for such replacements; and
 
 
   
other companies in our industry may calculate this measure differently than we do, limiting their usefulness as comparative measures.
Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to invest in business growth or to reduce indebtedness.
The following table provides a reconciliation of net income (loss) to Adjusted EBITDA for the periods presented:
 
   
Annual Periods
   
Interim Periods
       
   
Predecessor
   
 
   
Successor
   
Predecessor
   
 
   
Successor
   
Pro Forma
 
   
Year Ended
December 31,
   
Period
from
January 1
through
January 31,
   
 
   
Period from
February 1
through
December 31,
   
Period from
January 1
through
January 31,
   
 
   
Period from
February 1,
2020 through
September 30,
   
Nine

Months
Ended
September 30,
   
Year Ended
December 31,
   
Nine

Months
Ended
September 30,
   
Nine

Months
Ended
September 30,
 
   
2019
   
2020
   
 
   
2020
   
2020
   
 
   
2020
   
2021
   
2020
   
2020
   
2021
 
(In thousands)                                                                  
Net income (loss)
  $ 34,250     $ (36,530  
 
  $ (47,492   $ (36,530  
 
  $ (41,632   $ 666     $ (62,379   $ (58,956   $ 4,922  
Interest expense, net
    51,019       4,489    
 
    47,384       4,489    
 
    38,123       21,875       46,129       38,895       16,034  
Provision (benefit) for income taxes
    6,898       (871  
 
    (11,355     (871  
 
    (11,308     2,025       (4,739     (5,535     3,509  
Depreciation and amortization
    25,953       2,105    
 
    135,057       2,105    
 
    97,815       106,493       143,286       108,240       106,493  
Loss on extinguishment of debt
    —         10,533    
 
    —         10,533    
 
    —         13,938       —         —         13,938  
Share-based compensation
    1,216       3,976    
 
    1,876       3,976    
 
    1,331       4,569       9,245       7,757       4,670  
Transaction and acquisition related charges(a)
    1,198       22,840    
 
    10,146       22,840    
 
    9,578       6,510       10,616       10,048       6,510  

 
15

Table of Contents
   
Annual Periods
   
Interim Periods
       
   
Predecessor
   
 
   
Successor
   
Predecessor
   
 
   
Successor
   
Pro Forma
 
   
Year Ended
December 31,
   
Period
from
January 1
through
January 31,
   
 
   
Period from
February 1
through
December 31,
   
Period from
January 1
through
January 31,
   
 
   
Period from
February 1,
2020 through
September 30,
   
Nine

Months
Ended
September 30,
   
Year Ended
December 31,
   
Nine

Months
Ended
September 30,
   
Nine

Months
Ended
September 30,
 
   
2019
   
2020
   
 
   
2020
   
2020
   
 
   
2020
   
2021
   
2020
   
2020
   
2021
 
(In thousands)                                                                  
(continued)                                                                  
Integration and restructuring charges(b)
    —         327    
 
    3,413       327    
 
    288       584       3,740       615       584  
Other(c)
    3,239       153    
 
    747       153    
 
    936       196       900       1,089       196  
Adjusted EBITDA
  $ 123,773     $ 7,022    
 
  $ 139,776     $ 7,022    
 
  $ 95,131     $ 156,856     $ 146,798     $ 102,153     $ 156,856  
 
  (a)
Represents charges incurred related to acquisitions and similar transactions, primarily consisting of change in control-related costs, professional service fees, and other third-party costs. Additionally, the nine months ended September 30, 2021 includes incremental professional service fees incurred related to the IPO.
  (b)
Represents charges from organizational restructuring and integration activities outside the ordinary course of business.
  (c)
Represents
non-cash
and other charges primarily related to litigation-related expenses related to legal exposures inherited from legacy acquisitions, foreign currency (gains) losses, and (gains) losses on the sale of assets.
 
 
  (2)
Represents net income (loss) divided by total revenues.
 
  (3)
We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenues.
 
  (4)
We define Adjusted Net Income as net income before taxes adjusted for debt-related costs, acquisition-related depreciation and amortization, share-based compensation, transaction and acquisition-related charges, integration and restructuring charges, and other and
non-cash
charges, to which we then apply an effective tax rate of 26.4%, 25.7%, and 25.9% for the 2019, 2020, and 2021 periods, respectively. We describe these adjustments reconciling net income (loss) to Adjusted Net Income in the table below.
 
We present Adjusted Net Income because we believe it is a useful indicator of our operating performance. Our management uses Adjusted Net Income principally as a measure of our operating performance and believes that Adjusted Net Income is useful to investors because it is frequently used by analysts, investors, and other interested parties to evaluate companies in our industry. We also believe Adjusted Net Income is useful to our management and investors as a measure of comparative operating performance from period to period.
Adjusted Net Income is a
non-GAAP
financial measures and should not be considered as an alternative to net income (loss) as a measure of financial performance or any other performance measure derived in accordance with GAAP and it should not be construed as an inference that our future results will be unaffected by unusual or
non-recurring
items. In evaluating Adjusted Net Income, you should be aware that in the future, we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted Net Income should not be construed to imply that our future results will be unaffected by any such adjustments. Management compensates for these limitations by primarily relying on our GAAP results in addition to using Adjusted Net Income supplementally.
Our Adjusted Net Income measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
 
   
it does not reflect costs or cash outlays for capital expenditures or contractual commitments;
 
   
it does not reflect changes in, or cash requirements for, our working capital needs;

 
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it does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;
 
   
it does not reflect period to period changes in taxes, income tax expense, or the cash necessary to pay income taxes;
 
   
it does not reflect the impact of earnings or charges resulting from certain matters we consider not to be indicative of our ongoing operations; and
 
 
   
other companies in our industry may calculate this measure differently than we do, limiting their usefulness as comparative measures.
Because of these limitations, Adjusted Net Income should not be considered as a measure of discretionary cash available to invest in business growth or to reduce indebtedness.
The following table provides a reconciliation of net income (loss) to Adjusted Net Income for the periods presented:
 
   
Annual Periods
   
Interim Periods
                   
   
Predecessor
   
 
   
Successor
   
Predecessor
   
 
   
Successor
   
Pro Forma
 
   
Year Ended
December 31,
   
Period
from
January 1
through
January 31,
   
 
   
Period from
February 1
through
December 31,
   
Period from
January 1
through
January 31,
   
 
   
Period
from
February 1,
2020
through
September 30,
   
Nine

Months
Ended
September 30,
   
Year Ended
December 31,
   
Nine

Months
Ended
September 30,
   
Nine
Months
Ended
September 30,
 
   
2019
   
2020
   
 
   
2020
   
2020
   
 
   
2020
   
2021
   
2020
   
2020
   
2021
 
(In thousands)                                                                  
Net income (loss)
  $ 34,250     $ (36,530  
 
  $ (47,492   $ (36,530  
 
  $ (41,632   $ 666     $ (62,379   $ (58,956   $ 4,922  
Provision (benefit) for income taxes
    6,898       (871  
 
    (11,355     (871  
 
    (11,308     2,025       (4,739     (5,535     3,509  
Income (loss) before income taxes
    41,148       (37,401  
 
    (58,847     (37,401  
 
    (52,940     2,691       (67,118     (64,491     8,431  
Debt-related costs(a)
    3,174       11,102    
 
    3,242       11,102    
 
    2,344       19,703       9,194       8,494       19,110  
Acquisition-related depreciation and amortization(b)
    11,074       848    
 
    125,419       848    
 
    91,149       95,047       132,391       100,317       95,047  
Share-based compensation
    1,216       3,976    
 
    1,876       3,976    
 
    1,331       4,569       9,245       7,757       4,670  
Transaction and acquisition related charges(c)
    1,198       22,840    
 
    10,146       22,840    
 
    9,578       6,510       10,616       10,048       6,510  
Integration and restructuring charges(d)
    —         327    
 
    3,413       327    
 
    288       584       3,740       615       584  
Other(e)
    3,239       153    
 
    747       153    
 
    936       196       900       1,089       196  
Adjusted income before income tax effect
    61,049       1,845    
 
    85,996       1,845    
 
    52,686       129,300       98,968       63,829       134,548  
Less: Income tax effect(f)
    16,117       474    
 
    22,101       474    
 
    13,540       33,431       25,435       16,404       34,781  
Adjusted Net Income
  $ 44,932     $ 1,371    
 
  $ 63,895     $ 1,371    
 
  $ 39,146     $ 95,869     $ 73,533     $ 47,425     $ 99,767  
 
 
  (a)
Represents the loss on extinguishment of debt and
non-cash
interest expense related to the amortization of debt issuance costs for the financing for the Silver Lake Transaction.
 
  (b)
Represents the depreciation and amortization expense related to intangible assets and developed technology assets recorded due to the application of ASC 805,
Business Combinations
.
 
  (c)
Represents charges incurred related to acquisitions and similar transactions, primarily consisting of change in control-related costs, professional service fees, and other third-party costs. Additionally, the nine months ended September 30, 2021 includes incremental professional service fees incurred related to the IPO.
 

 
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  (d)
Represents charges from organizational restructuring and integration activities outside the ordinary course of business.
 
  (e)
Represents
non-cash
and other charges primarily related to legal exposures inherited from legacy acquisitions, foreign currency (gains) losses, and (gains) losses on the sale of assets.
 
  (f)
Effective tax rates of 26.4%, 25.7%, and 25.9% have been used to compute Adjusted Net Income for the 2019, 2020, and 2021 periods, respectively. As of December 31, 2020, we had net operating loss carryforwards of approximately $197.6 million, $166.2 million, and $36.0 million for federal, state, and foreign income tax purposes, respectively, available to reduce future income subject to income taxes. As a result, the amount of actual cash taxes we pay for federal, state, and foreign income taxes differs significantly from the effective income tax rate computed in accordance with GAAP and from the normalized rate shown above.
 
 
  (5)
The following table presents the calculation of Adjusted Diluted Earnings Per Share for the periods presented. Prior to the IPO, the equity awards under certain individual grant agreements were issued by the Company’s prior direct parent entity. As a result, these awards were not considered equity awards issued by the Company, and therefore not included in the calculation of adjusted weighted average number of shares outstanding—diluted.
 
 
   
Annual Periods
   
Interim Periods
       
   
Predecessor
        
Successor
   
Predecessor
         
Successor
   
Pro Forma
 
   
Year Ended
December 31,
   
Period
from
January 1
through
January 31,
        
Period from
February 1
through
December 31,
   
Period
from
January 1
through
January 31,
         
Period
from
February 1,
2020 through
September 30,
   
Nine
Months
Ended
September 30,
   
Year Ended
December 31,
   
Nine

Months
Ended
September 30,
   
Nine

Months
Ended
September 30,
 
   
2019
   
2020
        
2020
   
2020
         
2020
   
2021
   
2020
   
2020
   
2021
 
Diluted net income (loss) per share (GAAP)
  $ 0.21     $ (0.24       $ (0.37   $ (0.24         (0.32     0.00     $ (0.42   $ (0.39   $ 0.03  
Adjusted Net Income adjustments per share
                         
Income taxes
    0.04       (0.01         (0.09     (0.01         (0.09     0.01       (0.03     (0.04     0.02  
Debt-related costs(a)
    0.02       0.07           0.02       0.07           0.02       0.14       0.06       0.06       0.13  
Acquisition-related depreciation and amortization(b)
    0.07       0.01           0.96       0.01           0.70       0.69       0.88       0.67       0.63  
Share-based compensation
    0.01       0.03           0.01       0.03           0.01       0.03       0.06       0.05       0.03  
Transaction and acquisition related charges(c)
    0.01       0.15           0.08       0.15           0.07       0.05       0.07       0.07       0.04  
Integration and restructuring charges(d)
    —         0.00           0.03       0.00           0.00       0.00       0.02       0.00       0.00  
Other(e)
    0.02       0.00           0.01       0.00           0.01       0.00       0.01       0.01       0.00  
Adjusted income tax effect(f)
    (0.10     (0.00         (0.17     (0.00         (0.10     (0.24     (0.17     (0.11     (0.23
 
 
 
   
 
 
     
 
 
   
 
 
     
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Adjusted Diluted Earnings Per Share
(Non-GAAP)
  $ 0.27     $ 0.01         $ 0.49     $ 0.01           0.30       0.69     $ 0.49     $ 0.32     $ 0.66  
 
 
 
   
 
 
     
 
 
   
 
 
     
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Weighted average number of shares outstanding used in computation of Adjusted Diluted Earnings Per Share:
                         
Weighted average number of shares outstanding—diluted (GAAP)
    163,879,766       149,686,460           130,000,000       149,686,460           130,000,000       138,170,488       149,938,166       149,938,166       150,878,330  

 
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Annual Periods
   
Interim Periods
       
   
Predecessor
        
Successor
   
Predecessor
         
Successor
   
Pro Forma
 
   
Year Ended
December 31,
   
Period
from
January 1
through
January 31,
        
Period from
February 1
through
December 31,
   
Period
from
January 1
through
January 31,
         
Period
from
February 1,
2020 through
September 30,
   
Nine
Months
Ended
September 30,
   
Year Ended
December 31,
   
Nine

Months
Ended
September 30,
   
Nine

Months
Ended
September 30,
 
   
2019
   
2020
        
2020
   
2020
         
2020
   
2021
   
2020
   
2020
   
2021
 
(continued)                                                                 
Options and restricted stock not included in weighted average number of shares outstanding—diluted (GAAP) (using treasury stock method)
    —         —             —         —             —         —         —         —         —    
 
 
 
   
 
 
       
 
 
   
 
 
       
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Adjusted weighted average number of shares outstanding—diluted
(Non-GAAP)
    163,879,766       149,686,460           130,000,000       149,686,460           130,000,000       138,170,488       149,938,166       149,938,166       150,878,330  
 
 
 
   
 
 
     
 
 
   
 
 
     
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
 
  (a)
Represents the loss on extinguishment of debt and
non-cash
interest expense related to the amortization of debt issuance costs for the financing for the Silver Lake Transaction.
 
  (b)
Represents the depreciation and amortization expense related to intangible assets and developed technology assets recorded due to the application of ASC 805,
Business Combinations
.
  (c)
Represents charges incurred related to acquisitions and similar transactions, primarily consisting of change in control-related costs, professional service fees, and other third-party costs. Additionally, the nine months ended September 30, 2021 (Successor) includes incremental professional service fees incurred related to the IPO.
  (d)
Represents charges from organizational restructuring and integration activities outside of the ordinary course of business.
  (e)
Represents
non-cash
and other charges primarily related to legal exposures inherited from legacy acquisitions, foreign currency (gains) losses, and (gains) losses on the sale of assets.
  (f)
Effective tax rates of 26.4%, 25.7%, and 25.9% have been used to compute Adjusted Diluted Earnings Per Share for the 2019, 2020, and 2021 periods, respectively. As of December 31, 2020, we had net operating loss carryforwards of approximately $197.6 million, $166.2 million, and $36.0 million for federal, state, and foreign income tax purposes, respectively, available to reduce future income subject to income taxes. As a result, the amount of actual cash taxes we pay for federal, state, and foreign income taxes differs significantly from the effective income tax rate computed in accordance with GAAP and from the normalized rate shown above.

 
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RISK FACTORS
You should carefully consider the following risks before you decide to purchase our common stock. If any of the following risks actually occur, our business, results of operations, and financial condition could be materially adversely affected, the value of our common stock could decline, and you may lose all or part of your investment.
Risks Related to Our Business
The impact of
COVID-19
and related risks have affected and may continue to materially affect our business, results of operations, financial position, and/or liquidity.
The
COVID-19
pandemic and the ensuing actions that various governments have taken in response have created significant worldwide uncertainty, volatility, and economic disruption. The
COVID-19
pandemic has adversely impacted certain aspects of our business. The extent to which it will continue to do so will depend on a number of factors, many of which are highly uncertain, evolving, and beyond our control. These factors include, but are not limited to: (i) the duration and scope of the pandemic, including resurgences in various regions in the U.S. and globally and other future resurgences; (ii) governmental, business, and individual actions that have been and will continue to be taken in response to the pandemic, including travel restrictions, quarantines, social distancing, work-from-home and
shelter-in-place
orders, regulatory oversight and developments, and government shutdowns; (iii) the impact on the U.S. and global economies and the timing and rate of economic recovery, including the extent and duration of such impact on hiring and jobs; and (iv) impacts on the operations of our customers’ industries and individual businesses.
As the
COVID-19
pandemic continues and any associated protective or preventative measures and related legislation continue to be put in place or modified and adjusted in the United States and around the world, we may experience disruptions to our business. Risks presented by the ongoing effects of
COVID-19
include the following:
 
   
Operational Disruptions
. Due to the closure of courthouses and public record information sources at the onset of the
COVID-19
outbreak, many data sources were not available or current as workers were unable to access and update them. In some instances, where public record information was not digitized or available through electronic means, certain information and reports were inaccessible as they had to be retrieved in person. In certain courthouses around the country and other instances where public record information was only available through manual retrieval, and those data sources were closed due to
COVID-19
measures, information could not be retrieved or was delayed in being retrieved in order to fulfill background screening orders. This resulted in longer turnaround times, and depending on our customers’ preferences, delayed or required modification of customer deliverables. Courthouses and public record information sources may continue to be closed, or close again, due to resurgences of
COVID-19,
such as the current resurgence as a result of the Delta variant, and may continue to affect our access to data sources and interfere with customer deliverables.
In addition, while our experience with remote work thus far has not produced significant obstacles, our operations could be disrupted if key members of our senior management or a significant percentage of our workforce or the workforce of our vendors are unable to continue to work because of illness or otherwise.
 
   
Customers
. Certain of our existing customers reduced hiring, implemented hiring freezes, and/or modified their background screening programs due to declining business conditions, which has resulted in decreased demand and spending on our products. Our customers may continue to take such actions and, depending on the duration of the
COVID-19
pandemic, could also cease their business operations on a temporary or permanent basis. Certain sectors such as travel, live entertainment, dining, and
non-essential
retail, have been especially impacted by the pandemic. While the decrease in demand from customers in such sectors has been offset by increased demand from our customers in other sectors such as
e-commerce,
essential retail, and transportation and home delivery, such other