United States securities and exchange commission logo





                            July 2, 2021

       Steven L. Barnett
       Chief Legal & Risk Officer
       Sterling Ultimate Parent Corp.
       1 State Street Plaza
       24th Floor
       New York, New York 10004

                                                        Re: Sterling Ultimate
Parent Corp.
                                                            Draft Registration
Statement on Form S-1
                                                            Submitted June 8,
2021
                                                            CIK No. 0001645070

       Dear Mr. Barnett:

              We have reviewed your draft registration statement and have the
following comments. In
       some of our comments, we may ask you to provide us with information so
we may better
       understand your disclosure.

              Please respond to this letter by providing the requested
information and either submitting
       an amended draft registration statement or publicly filing your
registration statement on
       EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
       believe an amendment is appropriate, please tell us why in your
response.

             After reviewing the information you provide in response to these
comments and your
       amended draft registration statement or filed registration statement, we
may have additional
       comments.

       Draft Registration Statement on Form S-1 Submitted June 8, 2021

       Prospectus Summary, page 1

   1.                                                   We note your
presentation of Adjusted Operating Income in this section and elsewhere in
                                                        the filing. Please
revise your disclosures to present the most directly comparable GAAP
                                                        measure with equal or
greater prominence. We refer you to Item 10(e)(1)(i)(A) of
                                                        Regulation S-K and
Question 102.10 of Compliance & Disclosure Interpretations on Non-
                                                        GAAP Financial
Measures.
       Our Market Opportunity, page 3

   2.                                                   Please explain the
methodology and assumptions underlying your belief that the post-hire
 Steven L. Barnett
FirstName   LastNameSteven  L. Barnett
Sterling Ultimate Parent Corp.
Comapany
July 2, 2021NameSterling Ultimate Parent Corp.
July 2,2 2021 Page 2
Page
FirstName LastName
         monitoring market "could be nearly as large as the employment
screening market." Please
         also explain whether there is overlap between the addressable markets
you identify.
3.       You disclose that, pursuant to a Risk Based Security report, "the
total number of data
         records compromised in 2020 exceeded 37 billion, a 141% increase
compared to 2019 and
         by far the most records exposed in a single year since Risk Based
Security began reporting
         on data breach activity." Please disclose when Risk Based Security
began reporting on
         data breach activity.
Our Competitive Strengths, page 6

4.       In your discussion of your "Attractive financial profile," please
balance your discussion of
         free cash flow generation with a discussion of net losses.
5.       You disclose that in 2020, 17% of your revenue was generated outside
of the United
         States, "an increase from 2019." Please disclose the corresponding
percentage for 2019.
Growth Strategy, page 8

6.       Please explain the source for your belief that "there is a common
misperception among
         employers that background screening providers include identity
verification as part of
         their pre-employment screening process," and that "background
screening companies do
         not typically check identities or verify a candidate's biographic data
  two things that are
         critical for a successful background check."
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Trends and Other Factors Affecting Our Performance
New Product and Service Development, page 68

7.       You note that you "plan to pursue new adjacent market opportunities,"
including
         onboarding. However, throughout the prospectus, you reference
onboarding as an
         existing revenue-generating service provided by your company. Please
reconcile.
Components of Our Results of Operations
Revenues, page 72

8.       Please disclose the denominator for the New Client Growth and Base
Growth calculations.
         In this regard, we note that each metric is presented as a percentage
on page 76.
Results of Operations
Revenues, page 76

9.       You disclose that in 2020 you experienced high single-digit percentage
new client growth
         and low-teens percentage decline in base growth due to the COVID-19
pandemic. You
         further disclose that in the three months ended March 31, 2021, you
experienced mid-
         teens percentage new client growth and mid-single digit percentage
base growth, a
         significant improvement from the decline you had experienced in the
three months ended
 Steven L. Barnett
FirstName   LastNameSteven  L. Barnett
Sterling Ultimate Parent Corp.
Comapany
July 2, 2021NameSterling Ultimate Parent Corp.
July 2,3 2021 Page 3
Page
FirstName LastName
         March 31, 2020. Please revise your disclosures to quantify the
increase/decrease in
         revenues attributable to the new and base clients to provide your
readers with better
         insight into the underlying reasons behind the changes in your results
of operations. We
         refer you to Item 303(a) of Regulation S-K and Section III.D of SEC
Release No. 33-
         6835.
10.      Please revise to describe the extent to which changes in revenues are
attributable to
         changes in prices or to changes in the volume or amount of goods or
services being sold or
         to the introduction of new products or services. We refer you to Item
303(a) of
         Regulation S-K and Section III.D of SEC Release No. 33-6835.
Income Tax Benefit, page 78

11.      You disclose that the benefit from income taxes decreased by 2.0%, or
$0.2 million, from
         $(11.8) million for the year ended December 31, 2019 to $(11.6)
million for the year
         ended December 31, 2020 primarily due to a decrease in the U.S. state
deferred income
         tax provision. Please reconcile this statement with your disclosures
on page F-25 that
         appear to indicate the change in the income tax benefit is primarily
attributable to changes
         in both your state and international deferred income tax provision.
Non-GAAP Financial Measures, page 81

12.      We note your presentation of Adjusted Earnings Per Share and Adjusted
EBITDA
         Margin. Please revise your disclosures to present the most directly
comparable GAAP
         measure with equal or greater prominence. We refer you to Item
10(e)(1)(i)(A) of
         Regulation S-K and Question 102.10 of Compliance & Disclosure
Interpretations on Non-
         GAAP Financial Measures. Similarly revise your non-GAAP disclosures
elsewhere in
         your filing, as applicable.
13.      Please clarify why certain adjustments to your Non-GAAP financial
measures are proper.
         We note that you adjust for "M&A, optimization & restructuring",
"Technology
         transformation", and "Other". See Non-GAAP Compliance & Disclosure
Interpretations
         Question 100.1. Please provide an analysis of each item included in
those line items to
         support that such expenses are not normal, recurring, cash operating
expenses necessary to
         operate your business.
Critical Accounting Policies and Estimates
Goodwill, page 94

14.      We note your critical accounting policy for goodwill. To the extent
that any reporting unit
         is at risk of failing step one of the impairment test, disclose the
following:

                The percentage by which fair value exceeded carrying value as
of the date of the most
              recent test;
                The amount of goodwill allocated to the reporting unit;
                A description of the methods and key assumptions used and how
the key assumptions
 Steven L. Barnett
Sterling Ultimate Parent Corp.
July 2, 2021
Page 4
              were determined;
                A discussion of the degree of uncertainty associated with the
key assumptions. The
              discussion regarding uncertainty should provide specifics to the
extent possible; and
                A description of potential events and/or changes in
circumstances that could
              reasonably be expected to negatively affect the key assumptions.

         Alternatively, if no reporting unit is at risk of failing step one of
the test, please disclose
         that fact.
Pre-IPO Valuation of Equity, page 95

15.      When your preliminary IPO price is known, please provide us with a
breakdown of all
         equity awards granted from six month before the date of this letter
and leading up to the
         preliminary pricing of your IPO. This breakdown should list grants in
chorological order
         including the fair value of the underlying common stock used to value
such awards as
         determined by your board of directors. Please reconcile and explain
the differences
         between the fair values of the underlying equity interest determined
on each grant date,
         including the difference between the most recent grant date fair value
and the midpoint of
         your offering range. Your disclosure should fully describe the
assumptions utilized at the
         IPO valuation date that are significantly different than those used in
the most recent
         valuation. In addition, revise to disclose that the estimates will not
be necessary to
         determine the fair value of new awards once the underlying shares
begin trading.
Management
Executive Officers and Directors, page 123

16.      Please disclose which of your directors are affiliated with the
controlling stockholder and
         any arrangement or understanding by which each such director was or is
to be selected as
         a director or nominee. Refer to Item 401 of Regulation S-K.
Executive Compensation
Narrative Disclosure to Summary Compensation Table
Employment Agreements, page 130

17.      Please describe the relationship of Sterling Infosystems, Inc. to the
company or provide an
         organization chart.
Shares Eligible for Future Sale
Lock-up
FirstName Agreements,   page 148
            LastNameSteven     L. Barnett
Comapany
18.          NameSterling
        Please disclose the Ultimate Parent
                            exceptions to theCorp.
                                              lockup agreements with your
officers, directors and
July 2, existing
        2021 Pagestockholders.
                    4
FirstName LastName
 Steven L. Barnett
FirstName   LastNameSteven  L. Barnett
Sterling Ultimate Parent Corp.
Comapany
July 2, 2021NameSterling Ultimate Parent Corp.
July 2,5 2021 Page 5
Page
FirstName LastName
Consolidated Financial Statements
Revenue Recognition, page F-11

19.      You disclose that post-hire monitoring includes continuous screening
allowing for greater
         mobility and safety for remote, onsite and contingent jobs and also
ensuring prompt risk
         warnings on any changes to an employee   s profile. Please revise your
disclosures to
         describe how you recognize revenues for your post-hire monitoring
service. Tell us the
         amount of revenues recognized for your post-hire monitoring service
for each period
         presented.
20.      We note that incremental costs include commissions to the sales force
and are amortized
         over three years, as management estimates that this corresponds to the
period over which a
         customer benefits from the contract. Please help us better understand
how you determined
         the period over which a customer benefits from the contract. Tell us
whether you pay
         additional commissions upon contract renewals and whether those
renewal commissions
         are commensurate with the initial commission paid. Your response
should address how
         you considered that the average relationship for your top 100 clients,
based on 2019 and
         2020 total revenue, is nine years and growing. We refer you to ASC
340-40.
21.      We note from your disclosures that third-party data costs include
amounts paid to third
         parties for access to government records, other third-party data and
services, as well as
         costs related to your court runner network, and where applicable,
these are typically
         invoiced to your clients as direct pass-through costs. Please revise
your revenue
         recognition policy to clarify whether the various third-party cost are
recognized on a gross
         or net basis. Provide us with your analysis of the principal versus
agent considerations.
         We refer you to ASC 606-10-55-36 through 55-40.
Note 9. Income Taxes, page F-25

22.      We note you have experienced cumulative losses over the past two years
and that you
         maintain a valuation allowance of approximately $2.5 million at
December 31,
         2020 against your deferred tax asset. Please provide us with a
comprehensive analysis of
         your assessment of the realizability of your deferred tax assets as of
December 31, 2020
         and explain to us the basis for your conclusion that an additional
valuation allowance is
         not necessary. Describe your assessment of the positive and negative
evidence you
         considered and how the evidence was weighted to overcome the
determination that an
         additional valuation allowance is not necessary. We refer you to ASC
740-10-30-23.
Note 16. Segment Information, page F-34

23.      We note that you operate in several different countries outside the
United States, most
         notably the United Kingdom and Canada. Please explain how you
considered the
         guidance in ASC 280-10-50-41(a).
 Steven L. Barnett
FirstName   LastNameSteven  L. Barnett
Sterling Ultimate Parent Corp.
Comapany
July 2, 2021NameSterling Ultimate Parent Corp.
July 2,6 2021 Page 6
Page
FirstName LastName
Exhibits

24.      Please describe the consideration you have given to filing management
compensatory
         contracts, including the agreements with Messrs. Peirez, Paglia, and
Walker and any
         amendments thereto, the Annual Incentive Plan, and the 2015 Long-Term
Incentive Plan.
         Refer to Item 601(b)(10) of Regulation S-K.
General

25.      Please supplementally provide us with copies of all written
communications, as defined in
         Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
         present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
         not they retain copies of the communications.
       You may contact Morgan Youngwood, Senior Staff Accountant, at (202)
551-3479 or
Stephen Krikorian, Accounting Branch Chief, at (202) 551-3488 if you have
questions regarding
comments on the financial statements and related matters. Please contact Anna
Abramson, Staff
Attorney, at (202) 551-4969 or Larry Spirgel, Office Chief, at (202) 551-3815
with any other
questions.



                                                               Sincerely,

                                                               Division of
Corporation Finance
                                                               Office of
Technology
cc:      Andrew Barkan