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Acquisitions
 12 Months Ended
Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract]  
Acquisitions Acquisitions
Socrates and A-Check Acquisitions
On January 4, 2023, the Company acquired all of the outstanding shares of Socrates Limited and its affiliates (“Socrates”), a screening company in Latin America, pursuant to a share purchase agreement. The Socrates acquisition expands the Company’s global presence into Latin America to serve the rapidly growing regional hiring needs of both multi-national and local clients. On March 1, 2023, the Company acquired all of the outstanding shares of A-Check Global (“A-Check”), a U.S.-based employment screening organization, pursuant to a share purchase agreement. The A-Check acquisition provides the Company access to a high quality, enterprise-focused customer base diversified across verticals including healthcare and telecom. The aggregate adjusted purchase price for the acquisitions totaled approximately $66.2 million, of which $49.5 million was funded with available cash on hand, and is subject to certain closing adjustments specified in the share purchase agreements and included initial contingent consideration related to the A-Check acquisition of $4.7 million recorded at fair value. The contingent consideration was to be determined based on actual future results. The initial fair value of the contingent consideration consisted of $2.6 million for an earn-out payable one year after the acquisition based upon revenue
retention and a $2.1 million payable throughout the second and third year following the acquisition based on revenue retention and referral revenue. The Company recorded an allocation of the purchase price to assets acquired and liabilities assumed based on their estimated fair values as of their respective purchase dates. Additionally, in connection with the Socrates acquisition, $5.0 million is payable to certain senior employees two years after the acquisition date based on certain retention requirements.
The Company incurred approximately $2.0 million of transaction expenses related to the acquisitions during the year ended December 31, 2023.
The allocation of the purchase price is based on the fair value of assets acquired and liabilities assumed as of the applicable acquisition date. The following table summarizes the consideration paid and the amounts recognized for the assets acquired and liabilities assumed:
Preliminary Purchase Price AllocationFinal Purchase Price Allocation
(in thousands)March 31,
2023		Purchase Price AdjustmentsDecember 31,
2023
Consideration
Cash$11,935 $— $11,935 
Other current assets
Accounts receivable4,279 (3)4,276 
Other current assets805 447 1,252 
Property and equipment177 (1)176 
Intangible assets32,141 (1,268)30,873 
Other long-term assets6 — 6 
Total assets acquired$49,343 $(825)$48,518 
Accounts payable and accrued expenses1,156 94 1,250 
Other current liabilities1,291 (72)1,219 
Deferred tax liability8,388 (1,163)7,225 
Other liabilities2 788 790 
Total liabilities assumed$10,837 $(353)$10,484 
Total identifiable net assets38,506 (472)38,034 
Goodwill27,352 766 28,118 
Total consideration$65,858 $294 $66,152 
Goodwill recognized is primarily attributable to assembled workforce and expected synergies and is not tax deductible in future years. Intangible assets acquired consist largely of customer lists in the amount of $28.0 million to be amortized over 15 years. The remaining intangible assets include trade names, developed technology and a non-compete agreement, which will be amortized over two years, eight years, and five years, respectively.
The acquisitions are not material to the Company's financial position as of December 31, 2023 or results of operations for the year ended December 31, 2023, and therefore, pro forma operating results and other disclosures for the acquisitions are not presented.
EBI Acquisition
On November 30, 2021, the Company acquired all of the outstanding shares of Employment Background Investigations, Inc. (“EBI”) for a purchase price of $67.8 million, consisting of $66.3 million of cash and $1.5 million of contingent consideration recorded at fair value. The contingent consideration is limited to a maximum of $8.5 million of additional payments, to be determined based on actual future results. As of December 31, 2021, the fair value of this contingent consideration totaled $1.5 million and consisted of $0.9 million for an earn-out payable two years after the acquisition based upon revenue retention and $0.6 million payable throughout the year following the acquisition based on customer collections on receivables acquired. The Company recorded a preliminary allocation of the purchase price to assets acquired and liabilities assumed based on their estimated fair values as of November 30, 2021. As of December 31, 2022, the purchase price was reduced by $0.3 million reflecting the final determination of the post-closing adjustment of the purchase price in accordance with the purchase agreement with
EBI, resulting in an adjusted purchase price of $67.5 million. The receivable related to this adjustment was collected in February 2023.
Revenues and net earnings attributable to EBI for the year ended December 31, 2021 were immaterial to the Company’s total operating results for such period.
The Company incurred approximately $1.9 million of transaction expenses related to the acquisition of EBI during the year ended December 31, 2021.
The allocation of the purchase price is based on the fair value of assets acquired and liabilities assumed as of the acquisition date. The following table summarizes the consideration paid and the amounts recognized for the assets acquired and liabilities assumed:
Preliminary Purchase Price AllocationFinal Purchase
Price Allocation
(in thousands)November 30,
2021		Purchase Price AdjustmentsDecember 31,
2022
Consideration
Cash$— $— $— 
Other current assets— 
Accounts receivable8,861 — 8,861 
Prepaid expenses394 — 394 
Property and equipment1,290 — 1,290 
Intangible assets59,161 — 59,161 
Total assets acquired$69,706 $— $69,706 
Accounts payable and accrued expenses5,614 — 5,614 
Other current liabilities1,182 — 1,182 
Deferred tax liability16,566 (215)16,351 
Other liabilities298 — 298 
Total liabilities assumed$23,660 $(215)$23,445 
Total identifiable net assets46,046 215 46,261 
Goodwill21,721 (515)21,206 
Total consideration$67,767 $(300)$67,467 
Goodwill recognized is primarily attributable to assembled workforce and expected synergies and is not tax deductible in future years. Intangible assets acquired consist largely of customer lists in the amount of $56.0 million to be amortized over 15 years. The remaining intangible assets include trade names and a non-compete agreement, which will be amortized over two years and five years, respectively.
The following unaudited pro forma results for the year ended December 31, 2021 shows the effect on the Company’s revenues as if the acquisition of EBI had occurred on January 1, 2021. The pro forma results presented are the result of combining the revenues of the Company with the revenues of EBI. Pro forma net operating results are not presented as they were determined to not be material to the total net operating results of the Company. The Company did not have any material, non-recurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue.
For the Year Ended
(in thousands)December 31,
2021
Revenues
$679,542