Geo Group Inc (GEO) News & EventsGEOGeo Group Inc

Jones Analyst Positive on Geo Group's $950M Adelanto West Sale

Jones analyst Jason Weaver views Geo Group's Adelanto West sale to the Department of Homeland Security for $950M and increased share buyback as a positive. The sale was executed at $359,000 per bed, 44% above the $250,000 per bed "rumored ceiling," the analyst tells investors in a research note. Jones expects further asset sales in the near-term, particularly Tacoma and Aurora. It keeps a Buy rating on Geo with a $40 price target.

GEO Group Sells California ICE Centers for $950M

The GEO Group announced that the company has completed the sales of its 1,280-bed Adelanto West ICE Processing Center, 660-bed Adelanto East ICE Processing Center, and 704-bed Desert View Annex located in Adelanto, California to the United States of America and its assigns, by and through the Department of Homeland Security, for an aggregate gross sales price of $950M. After federal and state taxes and transaction fees and expenses, GEO anticipates receiving approximately $705M in net proceeds from these sales. GEO expects to continue providing support services under the company's existing contract with U.S. Immigration and Customs Enforcement for Adelanto East, Adelanto West, and Desert View, which has a full term effective through December 19, 2034, inclusive of the current term ending December 19, 2029 and a five-year option period. GEO expects to use the net proceeds from the sales along with cashflow from operations to reduce the company's debt, repurchase shares of the company's common stock, and for other general corporate purposes. GEO's Board of Directors has increased the company's share repurchase authorization, which is effective through December 31, 2029, by $750M to $1.25B. In addition to these completed sales, GEO remains engaged in an active process for the sale of multiple other company-owned facilities to ICE, subject to mutual agreement on price and GEO's continued management of those facilities under long-term support services contracts. At this time, there is no definitive agreement in place nor a precise timeline for the closing of any additional transactions, and GEO can provide no assurance that any additional transactions will occur.