Symphony Technology Group nears sale of First Advantage

Symphony Technology Group is close to finding a buyer for First Advantage, a background screening software company the firm acquired nine years ago, four sources familiar with the process told Buyouts.

JPMorgan is advising the company on its sale, the people said.

The sale process is in a second round, according to two people. The third source, however, said that the process is even further along with STG already having a buyer and a signed deal.

First Advantage, based in Atlanta, Georgia, provides background screening and identity services to employers and housing providers globally.

The company generated between $100 million and $125 million Ebitda and is likely to trade for low teens multiple, two people said. On the higher end, the sale would value First Advantage for as much as $1.75 billion.

The exit could generate a nice return for STG, which acquired First Advantage for $265 million in an all-cash deal from CoreLogic in December 2010.

Given the size of the company, the buyer is likely to be a strategic or a very large sponsor capable of writing a check of that size, the third source said.

Under STG’s ownership, First Advantage has changed its CEO and made several add-ons acquisitions. Two years ago, CEO Scott Staples replaced Mark Parise, who led First Advantage from 2013 to 2017.

In 2016, the company acquired Verifications, a Minneapolis-based drug testing and background checking company. In 2013, the company also acquired the screening business of LexisNexis Risk Solutions.

STG, headquartered in Palo Alto, California, acquires and builds software, data and analytics businesses.

STG, JPMorgan, and First Advantage did not return Buyouts’ requests for comments.

Action Item: See STG’s latest form ADV here.