The GEO Group to Acquire CentraCore Properties Trust
September 20 2006 - 9:34AM
PR Newswire (US)
- All Cash Transaction for $32.00 per Share BOCA RATON, Fla., Sept.
20 /PRNewswire-FirstCall/ -- The GEO Group, Inc. (NYSE:GEO)
("GEO"), a world leader in the delivery of correctional and mental
health services, announced today the signing of a definitive merger
agreement (the "definitive agreement") to acquire Palm Beach
Gardens-based CentraCore Properties Trust (NYSE:CPV) ("CPT"), a
correctional real estate investment trust. CPT owns 13 correctional
facilities totaling 8,071 beds, of which 11 facilities totaling
6,945 beds are currently leased to GEO under sale-lease back
agreements. In addition to the 11 facilities leased to GEO, CPT
owns the 400-bed Mesa Verde Correctional Facility, which is leased
to Cornell Companies and the 726-bed Delaney Hall, which is leased
to Community Education Centers. (Logo:
http://www.newscom.com/cgi-bin/prnh/20031201/FLM015LOGO ) Under the
terms of the definitive agreement approved by the boards of
directors of both GEO and CPT, shareholders of CPT will receive
$32.00 cash per common share or approximately $356.1 million, and
GEO will refinance CPT's debt at closing which is estimated to be
$40.0 million. In addition, CPT shareholders will receive a
pro-rated dividend for the quarter in which the merger is effected
through the closing date. The closing of the acquisition, which is
targeted for late 2006 or early 2007, is subject to the approval of
CPT's shareholders and federal regulatory agencies, and other
customary conditions, but it is not subject to financing
contingencies. George C. Zoley, Chairman and Chief Executive
Officer of GEO, said, "We are pleased with our proposed acquisition
of CentraCore Properties Trust. This acquisition eliminates any
uncertainty related to GEO's control and utilization of these
important assets, while at the same time significantly reducing our
exposure to escalating facility use costs in the future.
Strategically, the acquisition gives GEO the critical advantage of
having ultimate control and ownership of these facilities."
Facility Ownership Following the acquisition of CPT, GEO's owned
facilities will increase from four to 15 out of 62 worldwide
facilities under GEO management or under development. Financing GEO
plans to finance the acquisition of CPT including fees and expenses
through the use of $57 million in cash and $360 million in debt to
be arranged by BNP Paribas. Financial and Legal Advisers Lehman
Brothers acted as GEO's financial adviser in connection with this
transaction. Akerman Senterfitt served as GEO's legal advisor.
Citigroup Corporate and Investment Banking acted as CPT's exclusive
financial advisor in connection with the proposed transaction and
Goodwin Procter LLP provided legal advice to CPT. 2007 Financial
Guidance - Pre-Stock Split; Inclusive of CPT Acquisition GEO is
providing initial earnings guidance for 2007 as a result of the
acquisition of CPT. At this time, GEO expects 2007 earnings to be
in the pro-forma range of $2.40 and $2.60 per share excluding $0.15
per share in after-tax start-up expenses associated with new
facility openings. GEO's 2007 earnings guidance includes $10.0
million in non-cash depreciation expense associated with the CPT
acquisition and does not reflect the effect of GEO's 3-for-2 stock
split which will take effect on October 2, 2006. Conference Call
GEO will hold an investor and analyst conference call to discuss
the proposed CPT acquisition on Thursday, September 21, 2006 at
11:00 AM (Eastern Time). The call-in number for the U.S. is
1-866-578-5801 and the international call-in number is
1-617-213-8058. The participant pass-code for the conference call
is 22184613. In addition, a live audio webcast of the conference
call may be accessed on the Conference Calls/Webcasts section of
GEO's investor relations home page at
http://www.thegeogroupinc.com/. A replay of the audio webcast will
be available on the website for one year. A telephonic replay of
the conference call will be available until October 21, 2006 at
1-888-286-8010 (U.S.) and 1-617-801-6888 (International). The
pass-code for the telephonic replay is 42420536. About The GEO
Group The GEO Group, Inc. ("GEO") is a world leader in the delivery
of correctional, detention, and residential treatment services to
federal, state, and local government agencies around the globe. GEO
offers a turnkey approach that includes design, construction,
financing, and operations. GEO represents government clients in the
United States, Australia, South Africa, Canada, and the United
Kingdom. GEO's worldwide operations include 62 correctional and
residential treatment facilities with a total design capacity of
approximately 52,000 beds. About CentraCore Properties Trust
CentraCore Properties Trust ("CPT"), based in Palm Beach Gardens,
Fla., was formed in February 1998 to capitalize on the growing
trend toward privatization in the corrections industry. CPT has
expanded its scope to include essential purpose government real
estate projects outside the corrections sector, including mental
health and higher education facilities. CPT is dedicated to
ownership of properties under long-term, triple-net leases, which
minimizes occupancy risk and development risk. CPT currently owns
13 correctional facilities in nine states, all of which are leased,
with an aggregate completed design capacity of 8,071 beds.
Forward-Looking Statements This press release contains
forward-looking statements regarding future events and future
performance of the Company that involve risks and uncertainties
that could materially affect actual results, including statements
regarding estimated earnings, revenues and costs and our ability to
maintain growth and strengthen contract relationships. Factors that
could cause actual results to vary from current expectations and
forward-looking statements contained in this press release include,
but are not limited to: (1) GEO's ability to complete the
acquisition of CentraCore Properties Trust; (2) GEO's ability to
successfully pursue further growth and continue to enhance
shareholder value; (3) GEO's ability to access the capital markets
in the future on satisfactory terms or at all; (4) risks associated
with GEO's ability to control operating costs associated with
contract start-ups; (5) GEO's ability to timely open facilities as
planned, profitably manage such facilities and successfully
integrate such facilities into GEO's operations without substantial
costs; (6) GEO's ability to win management contracts for which it
has submitted proposals and to retain existing management
contracts; (7) GEO's ability to obtain future financing on
acceptable terms; (8) GEO's ability to sustain company-wide
occupancy rates at its facilities; and (9) other factors contained
in GEO's Securities and Exchange Commission filings, including the
forms 10-K, 10-Q and 8-K reports.
http://www.newscom.com/cgi-bin/prnh/20031201/FLM015LOGO
http://photoarchive.ap.org/ DATASOURCE: GEO Group CONTACT: Pablo E.
Paez, Director, Corporate Relations, of GEO Group, 1-866-301-4436
Web site: http://www.thegeogroupinc.com/
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