GEO Group To Acquire Community Education Centers For $360 Mln - Quick Facts

(RTTNews) - GEO Group, Inc. (GEO), a fully integrated equity real estate investment trust, said it has agreed to acquire Community Education Centers or CEC for $360 million in an all-cash transaction, excluding transaction related expenses. The transaction is expected to close the second quarter of 2017.

CEC is a private provider of rehabilitative services for offenders in reentry and in-prison treatment facilities as well as management services for county, state, and federal correctional and detention facilities.

Under the terms of the definitive agreement, GEO will not assume any debt as a result of the transaction. The transaction will be supported by a term loan financing commitment from BNP Paribas and borrowings under GEO's existing Revolving Credit Facility.

GEO plans to integrate CEC into GEO's existing business units of GEO Corrections & Detention and GEO Care.

CEC owns and/or manages over 12,000 beds nationwide. Through its Reentry Division, CEC owns or leases 3,800 community reentry beds and manages approximately 300 beds at three government-owned reentry centers. Additionally, CEC provides in-prison treatment services, including evidence-based rehabilitation programs, in more than 30 government-operated facilities.

Through its Corrections Division, CEC owns or leases approximately 4,500 correctional and detention beds and operates an additional 3,700 beds at government-owned correctional facilities under managed-only contracts.

GEO expects the acquisition to increase its total annualized revenues by approximately $250 million. In addition, the company anticipates annual net synergies of $5 million to be realized over 9 to 12 months.

Excluding one-time transaction-related expenses and transitional costs, GEO expects the acquisition to be modestly accretive in 2017 and to be 9 percent to 11 percent accretive to its adjusted EBITDA post-synergies on a fully annualized basis beginning in 2018.