Acompany that may know more about you than you know yourself is going public today and will establish its headquarters in downtown St. Petersburg.
Got a criminal past? Taken drugs lately? Are you a financial deadbeat? This company's business customers want to know.
Newly named First Advantage Corp. says it is well-positioned to benefit from the nation's post-Sept. 11 sense of caution and the business community's desire (and willingness to pay) to learn everything possible about job candidates, customers, competitors, renters and drivers.
Thank First Advantage chief executive and ex-New Yorker John W. Long for picking St. Petersburg as his HQ. The area's lower costs sure helped in the decision. But frankly, Long is a fan of the town and happily entrenched for years on the waterfront in Tierra Verde.
"We've been courted by a number of cities," Long, 47, said in an interview this week. "But this is a good place to be."
"Going public" is a phrase rarely heard in this country in recent years. But Long is scheduled to be in New York at 11 a.m. today to salute the market debut of First Advantage stock (its ticker will be FADV) in Nasdaq's high-tech headquarters in Times Square. Long says "First Advantage" was picked after he solicited possible names for the new company from employees. A sales manager came up with the name - one, remarkably enough, not taken already, Long says - and was rewarded $1,000.
The company employs nearly 1,000 nationwide, with 225 in the St. Petersburg area. An additional 100 or so jobs may end up here via growth and consolidations of accounting and other services from other offices. Locally, the bulk of First Advantage employees operate from offices in the Koger Center on Fourth Street N, but Long is looking at commercial space downtown for his headquarters. An affiliated business already has space in the SouthTrust building across the street from the popular BayWalk retail center. But Long says he still is looking at various downtown locations.
The arrival of First Advantage as a publicly trading business is the result of several deals. California's First American Corp., a Fortune 500-sized business information provider and now First Advantage's majority shareholder, reached agreement last year with US Search.com Inc., a major supplier of verification and screening services. The two companies said they would merge each of their screening and information businesses to form First Advantage, a corporation with $160-million in revenues.
Combining resources makes First Advantage a player in the background-screening world, ranking among the top three companies in each of its business lines.
At first, First American will own 80 percent and US Search.com will hold 20 percent of First Advantage. Within a year or so, Long says, he hopes to have a secondary offering of First Advantage stock to get more of the company shares into the hands of individual investors.
To suggest Long has been impatient for First Advantage to go public is an understatement. This is a guy who's acquired more than 50 businesses in the past decade. Long obviously loves doing deals and making something bigger than the sum of its corporate parts.
"We will do a lot of acquisitions," says Long. "This will be a big company." One reason is that the screening market is awash in Mom-and-Pop businesses. First Advantage's goal is to be a major player in an industry likely to be carved up among six or seven companies, including ChoicePoint of Georgia and New York's Kroll Inc.
Until today, Long served as president of First American's screening information group. He has bought screening businesses rapidly, often at premium prices. Parent First American in California did not mind the expense. But to generate more value, the company hit on the idea of combining forces with US Search.com and spinning off First Advantage. That way, the new company can leverage its own stock as an acquisition currency in future deals.
First Advantage is made up of several businesses, including St. Petersburg's HireCheck Inc. (once known as CIC in Largo), which provides employment background checking for more than 4,000 U.S. companies. Other First Advantage companies include First American Registry and SafeRent (tenant screening), Substance Abuse Management Inc. (employee drug testing), and American Driving Records (screening drivers for transportation jobs).
All of those separate names will disappear over time and be replaced by the single brand name of First Advantage.
Long began his career in the tax service industry. After working for Ticor Realty Tax Service, Long started his own company in 1986 and served as president of Metropolitan Realty Tax Service in New York. First American acquired Metropolitan in 1990 and made Long a regional vice president. He was promoted several times and later became president of HireCheck.
Long says screening people's backgrounds is here to stay. In fact, the process is becoming increasingly automated, as computers are able to tap more and more databases of personal and, since 9/11, government-collected information.
In employee drug testing, analyzing saliva is becoming more popular than urine tests. Traditional testing for marijuana and cocaine must be frequently expanded to keep up with whatever is the current rage. For example, ecstasy is included in testing, especially now that Florida leads the nation in trafficking arrests for the drug.
Will First Advantage's growth strategy work? Acquisitions are key. But some positive signs of a strengthening economy will help, too. While businesses may want all kinds of employee screening, it's tough to boost demand for background data when most companies simply are not hiring new workers.
