GEO buys CEC for $360 mln

The GEO Group has acquired Community Education Centers, a provider of rehabilitative services in reentry and in-prison treatment facilities as well as management services for county, state and federal correctional and detention facilities. The price of the transaction was $360 million.

PRESS RELEASE

BOCA RATON, Fla.–(BUSINESS WIRE)–The GEO Group, Inc. (NYSE:GEO) (“GEO”), a fully integrated equity real estate investment trust (“REIT”) specializing in the design, financing, development, and operation of correctional, detention, and community reentry facilities around the globe and a leading provider of evidence-based rehabilitation, announced today the closing of its previously announced acquisition of Community Education Centers (“CEC”), a leading national provider of rehabilitative services in reentry and in-prison treatment facilities as well as management services for county, state, and federal correctional and detention facilities.

GEO acquired CEC for $360 million in an all cash transaction, excluding transaction related expenses. GEO plans to integrate CEC into GEO’s existing business units of GEO Corrections & Detention and GEO Care.

Community Education Centers (CEC) Operations

Founded in 1996, CEC owns and/or manages over 12,000 beds nationwide including more than 7,000 community reentry beds. Additionally, CEC provides in-prison treatment services, including evidence-based rehabilitation programs, in more than 30 government-operated facilities. More than 70 percent of CEC’s annualized revenue is generated from contracts with state governments and more than 20 percent from contracts with local jurisdictions.

Following the acquisition, GEO owns and/or manages 142 facilities totaling approximately 99,000 beds, including more than 10,000 community reentry beds, with a growing workforce of 23,500 employees worldwide.

George C. Zoley, Chairman and Chief Executive Officer of GEO, said: “We are pleased to have closed on our previously announced acquisition of CEC, which represents a compelling strategic fit for our company. This important transaction further positions GEO to meet the demand for increasingly diversified correctional, detention, and community reentry facilities and services and will allow us to expand the delivery of enhanced in-prison rehabilitation including evidence-based treatment, integrated with post-release support services, through our industry-leading ‘GEO Continuum of Care.’ Our continued efforts to be the leading provider of rehabilitation and reentry services underscore our commitment to improve the lives of the men and women entrusted to us as well as our belief that as a company, we are most effective and at our best by helping those in our care re-enter society as productive and employable citizens.”

Financial Impact
The acquisition of CEC is expected to increase GEO’s total annualized revenues by approximately $250 million. In addition, GEO anticipates annual net synergies of $5 million to be realized over 9 to 12 months. GEO expects the acquisition of CEC to be 9-11% accretive to Adjusted EBITDA post-synergies on a fully annualized basis beginning in 2018.

About The GEO Group, Inc.
The GEO Group, Inc. (NYSE: GEO) is the first fully integrated equity real estate investment trust specializing in the design, financing, development, and operation of correctional, detention, and community reentry facilities around the globe. GEO is the world’s leading provider of diversified correctional, detention, community reentry, and electronic monitoring services to government agencies worldwide with operations in the United States, Australia, South Africa, and the United Kingdom. GEO’s worldwide operations include the ownership and/or management of 142 facilities totaling approximately 99,000 beds, including projects under development, with a growing workforce of approximately 23,500 professionals.