GEO Group gets $175 million credit facility commitment for Correctional Services purchase

By Sara Rosenberg

New York, July 14 - The GEO Group Inc. has received a commitment for a $175 million credit facility in connection with its acquisition of Correctional Services Corp., according to a company news release. BNP Paribas is the lead bank on the deal.

The facility consists of a $75 million term loan and a $100 million revolver.

In addition to helping fund the acquisition, proceeds from the loan will be used to refinance GEO's existing $41 million term loan and for general corporate purposes.

Under the acquisition agreement, shareholders of Correctional Services will receive $6.00 cash per common share or $62 million, and GEO will assume $124 million of Correctional Services debt.

The closing of the acquisition, which is subject to the approval of Correctional Services' shareholders, federal regulatory agencies and other customary conditions, is targeted for the beginning of the fourth quarter.

Following the acquisition, GEO plans on divesting Correctional Services' juvenile services division.

GEO is a Boca Raton, Fla.-based provider of correctional and detention management, health and mental health, and other diversified services to federal, state and local government agencies. Correctional Services is a Sarasota, Fla.-based developer and manager of privatized correctional and detention facilities.

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