GEO Group sets Wednesday launch for $750 million credit facility

By Sara Rosenberg

New York, June 22- GEO Group Inc. has scheduled a bank meeting for Wednesday morning to launch its proposed $750 million credit facility, according to a market source.

BNP Paribas is the lead bank on the deal.

The facility consists of a $400 million five-year revolver talked at Libor plus 275 basis points, a $150 million five-year delayed-draw term loan A talked at Libor plus 275 bps and a $200 million six-year term loan B talked at Libor plus 325 bps with a 1.5% Libor floor, the source said.

The original issue discount on the term loan B is still to be determined.

Proceeds will be used to refinance existing debt and to help fund the acquisition of Cornell Cos. Inc.

Previously, the company had said that it would get $150 million of additional bank debt for the acquisition through the existing credit facility's accordion feature.

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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.