Filing Flows › First Advantage (FA) › Takeover & LBO
Is First Advantage (FA) a takeover target?
A leveraged buyout at today's price plus 30% ($28.07 a share) would return about 5% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $13.82 a share (−36% against today's $21.59). It already carries 6.1× EBITDA in net debt (the model flags anything over 6×), so a buyer could add little debt of its own. Historically 5.7% of companies with its figures were bought within a year (1.13× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $28.07 | today's $21.59 plus 30% |
| × shares | 175.4 million | |
| = Equity value | $4.9B | |
| + Debt refinanced | $2.1B | |
| − Cash | $241M | |
| = Enterprise value | $6.8B | 22.1× EBITDA of $308M |
| Fees | $136M | 2% of the price |
| New debt | $1.7B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $5.2B | 76% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $1.9B | $332M | $129M | $148M | $1.5B |
| Year 2 | $2.0B | $355M | $118M | $175M | $1.4B |
| Year 3 | $2.1B | $374M | $105M | $201M | $1.2B |
| Year 4 | $2.2B | $390M | $89.4M | $225M | $943M |
| Year 5 | $2.2B | $402M | $72.1M | $249M | $694M |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 18.4× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $7.4B | |
| − Debt left | $694M | |
| = Buyer's equity | $6.7B | |
| Money multiple | 1.28× | on $5.2B put in |
| Buyer's yearly return (IRR) | 5.0% |
Price against return
What the buyer makes at other premiums over today's $21.59; the IRR reaches 20% at $13.82 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $23.75 | 8.4% |
| 20% | $25.91 | 6.7% |
| 30% | $28.07 | 5.0% |
| 40% | $30.23 | 3.5% |
| 50% | $32.38 | 2.2% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $1.7B | |
| EBITDA, last 12 months | $308M | 17.9% of revenue |
| Depreciation and amortization | $112M | |
| Capital spending | $14.8M | |
| Debt | $2.1B | |
| Cash | $241M | |
| Share price | $21.59 | on Oct 30, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 30% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, First Advantage would cost about $28.07 a share, $4.9B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 12% | $24.18 | $4.2B |
| Median | 30% | $28.07 | $4.9B |
| High end (a quarter paid more) | 31% | $28.28 | $5.0B |
The odds, from history
Historically 5.7% of companies with its figures were bought within a year (1.13× the average). Its figures put it in decile 7 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
First Advantage's latest quarter
First Advantage, Q3 2026: revenue $466M (+14% year over year), operating margin 12.9%, net earnings $20.5M, operating cash flow $63.8M. The chart follows the revenue to costs, profit and cash.
Questions
Is First Advantage being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy First Advantage?
A leveraged buyout at today's price plus 30% ($28.07 a share) would return about 5% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $13.82 a share (−36% against today's $21.59). It already carries 6.1× EBITDA in net debt (the model flags anything over 6×), so a buyer could add little debt of its own.
What would a takeover of First Advantage cost?
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, First Advantage would cost about $28.07 a share, $4.9B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.