September 30, 2022

Wagit Mart

Reach Out And Touch Business

First Advantage, Sprinklr See Shares Spike in Trading Debuts

First Advantage



kicked off life as public companies Wednesday, with shares of First Advantage rising 31% while Sprinklr jumped 10%.

First Advantage traded on the Nasdaq, while Sprinklr opened on the New York Stock Exchange. The listings come during a busy week for the IPO market. Roughly 17 companies are expected to list their shares this week. 

Shares of First Advantage (ticker: FA) opened at $19.85, peaked at $20.50, and ended at $19.70, up $4.70, or 31%, from its offer price.

“This is the culmination of years of hard work,” CEO
Scott Staples
told Barron’s. “We’re extremely happy to be a publicly traded company. We know this will propel us in the future and put us in a great position to grow.” 

First Advantage “loosely” considered merging with a special purpose acquisition company, or SPAC, Staples said. “We talked to a few and covered those bases. Our primary strategy was always to do a public listing,” he said.  

This is the second trip to the public markets for the Atlanta-based company, which went private in 2009. This time around, First Advantage raised about $383 million after increasing the size of its deal by 20% and pricing at the top of its range. It ended up selling 25.5 million shares at $15 each. This is up from the 21.25 million shares at $13 to $15 it had planned to offer.


BofA Securities, and

J.P. Morgan

are underwriters on the deal. 

First Advantage provides screening and verification services for companies on their employees, contractors, contingent workers, tenants, and drivers. Services include criminal background checks, drug and health screening, education and work verifications, executive screening, data analytics, and social-media monitoring. Last year, First Advantage performed over 75 million screens on behalf of more than 30,000 customers, the prospectus said. Clients include


(C) and Kelly Services.

First Advantage isn’t profitable. Losses narrowed to $19.3 million for the three months ended March 31, compared with $21.8 million in losses for the same period in 2020, the prospectus said. Revenue rose 19% to $132 million for the quarter ended March 31. 

Most of First Advantage’s revenue comes from the onboarding services it provides its customers, Staples said. This includes criminal background checks and prior employment verification. First Advantage counts more than half of the Fortune 100 as customers, he said. 

First Advantage plans to use proceeds from the IPO to pay down its $567 million in debt, Staples said. It may also take part in M&A, although Staples said he doesn’t want First Advantage to be “a rollup company.” It recently completed its first deal, buying the background screening business of

GB Group

in April.

Any future deals would have to be “easily digestible” and something First Advantage could plug into its platform without having to do a major integration, he said. “We’re now in a good position to do other strategic acquisitions on top of our existing platform,” Staples said.

In January 2020, Silver Lake, a private-equity firm, acquired First Advantage from Symphony Technology Group, another PE firm, for about $1.6 billion, the prospectus said. 

Silver Lake sold about three million shares in the IPO and made about $46 million. It will own 75.3% of First Advantage after the IPO. 

Sprinklr (CXM) also begin trading Wednesday. Shares opened at $14.60, hit a high of $19.97, and closed at $17.60, up $1.60, or 10%, from their offer price.

The New York-based company collected $266 million after chopping the size of its deal by 12.5% and pricing below its expected range. Sprinkler ended up selling 16.625 million at $16. It had planned on offering 19 million shares at $18 to $20 each.

Morgan Stanley,

J.P. Morgan,


Barclays, and Wells Fargo Securities are lead bookrunners on the deal. 

Founded in 2009, Sprinklr provides an AI-powered customer-experience platform that handles a company’s communication and advertising in one spot. This includes messaging, chat, text, and social. The company has 1,021 customers, including


(MCD), Microsoft (MSFT),


(OR.France), and Verizon Communications (VZ).   

Sprinklr provides “a unified platform for large businesses to do all their customer facing functions,” said founder and CEO
Ragy Thomas,
who spoke to Barron’s before the stock began trading. The company plans to use proceeds from the IPO to invest in its platform, as well as for sales, marketing and R&D. While Sprinklr has been acquisitive, buying a dozen companies in the past 12 years, the company will seek to grow organically, he said. “We will use the M&A lever for growth very prudently,” Thomas said. 

Sprinklr didn’t consider merging with a SPAC to tap the public equity markets, Thomas said. Its goal in listing was to have a platform to tell its story. “A traditional IPO provides the best vehicle to do that,” he said.

The company isn’t profitable. Losses widened to $14.7 million for the quarter ended April 30 from $11.2 million for the same period in 2020. The company has 2,469 employees.

Hellman & Friedman, the private-equity firm, invested $200 million in Sprinklr last year at a $2.7 billion valuation. It will own nearly 25% after the IPO. 

Thomas said the world, and technology, changes every 30 years. Digital transformation isn’t an option for businesses anymore, he said. There are companies out there that provide customer service software, like


(ZEN), as well as marketing businesses, he said. Sprinklr is building a modern way to provide customer care as well as advertising, he said. “We are the first platform to write code with a vision of bringing it all together,” Thomas said. 

Write to Luisa Beltran at