Printer Friendly

The GEO Group closes USD360m Community Education Centres acquisition.

M2 EQUITYBITES-February 23, 2017-The GEO Group closes USD360m Community Education Centres acquisition

(C)2017 M2 COMMUNICATIONS http://www.m2.com

Correctional & detention company The GEO Group Inc (NYSE:GEO) reported on Wednesday the launch of a definitive agreement to acquire Community Education Centres (CEC) for USD360m in an all cash transaction, excluding debt and transaction related expenses.

Following closing, GEO intends to integrate CEC into GEO's existing business units of GEO Corrections & Detention and GEO Care. GEO will own and/or manage approximately 98,000 beds worldwide including approximately 7,000 community reentry beds.

Founded in 1996, CEC is a leading national provider of rehabilitative services for offenders through reentry and in-custody treatment programs as well as comprehensive management services for county, state, and federal correctional and detention facilities. It provides evidence-based programming for residential and non-residential clients through reentry and correctional facilities, in-prison treatment services, and outpatient and day reporting programmes. It owns and/or manages 12,000 beds nationwide.

Through its Reentry Division, CEC owns or leases 3,800 community reentry beds and manages 300 beds at three government-owned reentry centers. Through its Corrections Division, CEC owns or leases 4,500 correctional and detention beds and operates an additional 3,700 beds at government-owned correctional facilities under managed-only contracts. About 70% of CEC's annual revenue is generated from contracts with state governments and about 20% from contracts with local jurisdictions.

In conjunction, the acquisition is expected to increase GEO's total annual revenues by USD250m, expects annual net synergies of USD5m to be realized over nine to 12 months as well as to be modestly accretive in 2017 and to be 9-11% accretive to Adjusted EBITDA post-synergies on a fully annual basis beginning in 2018.

This transaction is expected to close the second quarter of 2017 subject to the fulfillment of customary conditions.

((Comments on this story may be sent to info@m2.com))

COPYRIGHT 2017 Normans Media Ltd.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2017 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:M2 EquityBites (EQB)
Date:Feb 23, 2017
Words:315
Previous Article:Aeolus begins Phase 1 Study of AEOL 10150 in healthy normal volunteers for indication in national defense and oncology.
Next Article:RE/MAX Holdings announces 20% higher dividend of USD0.18 per share for quarter.
Topics:

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters