GEO gets $425 million debt commitment for Behavioral Interventions buy

By Sara Rosenberg

New York, Dec. 21 - The GEO Group has received a commitment for $425 million of debt financing to fund its acquisition of Behavioral Interventions Inc., company officials said in a conference call on Tuesday.

BNP Paribas, Wells Fargo, Bank of America, Barclays Capital, SunTrust and JPMorgan are the lead banks on the financing.

Officials remarked that they think the debt will be comprised of both floating- and fixed-rate financing, but the components haven't been finalized.

Incremental interest expense will be $25 million to $35 million, "depending on how the financing is ultimately structured," officials added in the call.

GEO is purchasing Behavioral Interventions, a Boulder, Colo.-based provider of electronic monitoring services, for $415 million in an all-cash transaction, excluding transaction-related expenses.

The acquisition is expected to increase GEO's total annual revenues by about $115 million to more than $1.6 billion in 2011, and it is also expected to materially increase GEO's EBITDA and cash flow on a fully annualized basis.

The transaction is expected to close in the first quarter of 2011, subject to approval by federal regulatory agencies as well as other customary conditions.

GEO is a Boca Raton, Fla.-based provider of correctional, detention, and residential treatment services to federal, state and local government agencies.

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