The GEO Group (GEO) – Asset Sale Funds Additional Debt Repayment

Aerospace and Defense
0 min read

Thursday, September 22, 2022

The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 103 facilities totaling approximately 83,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Asset Sale. The GEO Group has sold its minority equity interest in the government-owned Ravenhall Correctional Centre in Australia for approximately $84.4 million in gross proceeds, or about $75 million after-tax. GEO, as part of a consortium, originally began developing the Ravenhall facility in late 2014, with the facility opened in late 2017.

Use of Proceeds. GEO will use the proceeds, along with available cash on hand, to repay all of the remaining $146.9 million outstanding principal of its Term Loan B and its Tranche 3 Term Loan, both due March 23, 2024. Along with the repayment of the 5.125% senior notes due 2023, GEI has now reduced outstanding debt maturing prior to 2026 to approximately $23 million, a significant accomplishment, in our view.

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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 


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