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Stock Market & Financial Investment News

News Breaks
August 4, 2014
08:48 EDTGEOGeo Group selected as preferred tenderer for development of Ravenhall Prison
The GEO Group announced that a GEO led consortium comprised of GEO’s wholly-owned subsidiary, The GEO Group Australia Pty, John Holland Construction, and Honeywell has been selected as the preferred tenderer by the Department of Justice in the State of Victoria for the development and operation of a new 1,000-bed Prison in Ravenhall, a locality near Melbourne, Australia. Following a final contract award, GEO expects to begin the development of the Facility in 2015 under a Public-Private Partnership financing structure with an equity investment from GEO of approximately 20% of the project following the activation of the Facility, and with returns on investment consistent with GEO’s company-owned facilities. GEO Australia would operate the Facility under a 25-year contract with Corrections Victoria upon its completion in late 2017. The Facility will provide unprecedented levels of in-prison and post-release programs aimed at reducing reoffending rates and helping offenders reintegrate into society.
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January 26, 2015
07:57 EDTGEOGeo Group announces acquisition of eight facilities totaling over 6,500 beds
The GEO Group announced the signing of a definitive agreement to acquire eight correctional and detention facilities totaling more than 6,500 beds from LCS Corrections Services, a privately-held owner and operator of correctional and detention facilities in the United States, and its affiliates. The LCS transaction will be an asset purchase. Pursuant to the terms of the definitive agreement, GEO will acquire the LCS Facilities for approximately $312M, or approximately $48,000 per bed, in an all cash transaction, excluding transaction related expenses. Additionally, LCS has the opportunity to receive an additional payment if the Facilities exceed certain performance targets after the closing over a period of approximately 18 months. The aggregate amount of the purchase price to be paid at closing and the Earnout Payment, if achieved, will not exceed $350M. LCS will use the proceeds to repay approximately $302M in outstanding net debt. GEO will not assume any debt as a result of the transaction. GEO will finance the acquisition of the LCS Facilities with borrowings under its $700M Revolving Credit Facility. Following the LCS transaction, GEO will have approximately $260M in available borrowing capacity under its Revolving Credit Facility. The transaction is expected to close by the end of February 2015, subject to the fulfillment of customary closing conditions. On an annualized basis, the acquisition is expected to immediately increase GEO’s revenues by approximately $75M-$80M and be initially 10c-12c accretive to AFFO per share, excluding one-time transaction-related expenses. Additionally, GEO expects to achieve substantial improvements in the utilization of the LCS Facilities which is expected to create additional accretion to AFFO per share over the next 12-24 months.

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