Today, we have yet another secondary deal between private equity firms.
Castle Harlan is buying Securus Technologies from H.I.G. Capital, according to my companeros at Thomson Reuters Loan Pricing Corp. Castle Harlan is currently in the market for a $365 million loan to back the deal. BNP Paribas and GE Capital are leading the financing.
In April, Securus also applied with the FCC to transfer control of the company to “Connect Acquisition Corp.” which is owned by Castle Harlan.
H.I.G. has owned Securus since the fall of 2004. The Miami PE firm combined Evercom Holdings with T-Netix to form Securus, which provides communications services for the corrections industry. In 2007, Securus acquired Syscon Holdings, which offers management software to correctional facilities.
The Dallas-based Securus services about 2,400 prisons and more than 850,000 inmates in 44 states, according to the company website.
“HIG did a good job turning around the asset,” one private equity executive said. While the Securus sale is a telcom deal, the value is in the prison contracts, the PE source said.
Securus reported that revenues dropped 6.5% to $363.4 million for the year ended Dec. 31, 2009. Net losses narrowed to $21.1 million in 2009 from $34 million in 2008.
News of Securus Tech’s sale was first reported by Standard & Poor’s Leveraged Commentary & Data.
Officials for Castle Harlan declined comment. HIG Capital could not be reached for comment.