GEO Group sells Oklahoma prison to state for $312 million

BOCA RATON - The GEO Group, Inc. (NYSE:GEO), a $3.62 billion market cap correctional facilities operator showing strong momentum with an 8.25% gain last week, completed the sale of its Lawton Correctional Facility in Oklahoma to the State of Oklahoma for $312 million on July 25, according to a company press release.

The transaction includes the immediate transfer of facility operations to the Oklahoma Department of Corrections. GEO plans to use the proceeds to acquire the 770-bed Western Region Detention Facility in San Diego, California in a property exchange expected to close on July 31, and to pay down outstanding debt under its Credit Agreement.

The company stated that these transactions are expected to reduce its total net debt to approximately $1.47 billion.

"We believe that the successful sale of our Lawton Facility is representative of the intrinsic value of our Company-owned facilities, which now total approximately 50,000 beds," said George C. Zoley, Executive Chairman of GEO.

The company indicated that the transaction strengthens its balance sheet and positions it to consider potential future capital returns to shareholders.

GEO Group describes itself as a provider of government services specializing in secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. The company reports operations in 97 facilities with approximately 74,000 beds and a workforce of up to 19,000 employees.

In other recent news, The GEO Group has reported several significant developments. The company plans to use $222 million from the sale of its Lawton Facility and liquidity from its new $450 million revolving credit facility to repay senior secured debt, which has led S&P Global Ratings to upgrade the company to ’BB-’ from ’B+’ with a positive outlook. Additionally, GEO Group has expanded its credit facility to $450 million and extended the maturity date to 2030, reducing the interest rate on revolving credit loans. The company has also entered into an agreement to acquire the Western Region Detention Facility in San Diego for $60 million, which is expected to generate about $57 million in annualized revenues.

In another development, GEO Group has extended the employment term of Executive Chairman George C. Zoley to April 2029 and increased his compensation package, including bonuses and stock awards. Furthermore, Texas Capital Securities has initiated coverage on GEO Group with a Buy rating, citing increased border security funding expectations as a potential revenue and margin growth opportunity. These recent developments reflect GEO Group’s strategic moves to strengthen its financial position and expand its operations.

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