GEO Group's $150 million of add-on bank debt to include term loan, maybe revolver

By Sara Rosenberg

New York, May 5 - GEO Group Inc.'s $150 million of additional bank debt for the acquisition of Cornell Cos. Inc. will come in the form of a term loan, and possibly a revolver, according to an S-4 filed with the Securities and Exchange Commission on Wednesday.

The new debt is through the existing credit facility's accordion feature.

Any add-on term loan will mature on Jan. 24, 2014 - same as the existing term debt - and any add-on revolver will mature on Sept. 14, 2012 - unchanged from the existing revolver.

Pricing on the add-on term loan is expected at Libor plus 325 basis points.

BNP Paribas is the lead bank on the deal.

Under the agreement, GEO Group will acquire Cornell at an estimated enterprise value of $685 million, including the assumption of $300 million in Cornell debt and excluding cash.

Cornell stockholders can choose to receive GEO common stock or cash. In order to preserve the tax-deferred treatment of the transaction, no more than 20% of the outstanding shares of Cornell common stock may be exchanged for cash.

The merger is expected to close in the third quarter.

Boca Raton, Fla.-based GEO Group and Houston-based Cornell are prison operators.

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