BOCA RATON – The Geo Group, a Boca Raton-based private provider of correctional, detention and residential treatment services to federal, state and local government agencies around the globe, has announced the successful closing of its previously announced merger with Cornell Companies, Inc.
GEO Group acquired Cornell for stock and cash at an estimated value of $730 million, including the assumption of approximately $290 million in Cornell debt, excluding cash.
Cornell is a private provider of corrections, treatment and educational services outsourced by federal, state and local governmental agencies. In connection with the merger, GEO will issue approximately 15.8 million shares in exchange for 80 percent of the outstanding shares of Cornell common stock.
The remaining 20 percent of the outstanding shares of Cornell common stock will receive cash consideration totaling some $85 million. Following the merger, GEO will have about 65 million diluted shares outstanding.
“This strategic merger marks an important milestone for GEO and better positions the company to meet the increasing demand for correctional, detention and residential treatment facilities and services,” said George C. Zoley, GEO’s chairman and CEO.
“This transformational event creates a stronger company with revenues of approximately $1.5 billion, enhanced scale, diversification, and complementary service offerings.”
Following the merger, GEO now manages and/or owns 119 correctional, detention and residential treatment facilities with a total design capacity of approximately 81,000 beds and eight non-residential service centers with a total service capacity of approximately 1,400.
The merger is also expected to substantially increase GEO’s EBITDA, net income, and adjusted funds from operations (formerly referred to as adjusted free cash flow) on a fully annualized basis.
GEO operates correctional facilities in the United States, Australia, South Africa, and the United Kingdom.