NASHVILLE, TN -- (Marketwired) -- 08/31/15 --
CCA (NYSE: CXW) (the "Company" or "Corrections Corporation of America"), America's largest owner of partnership correctional and detention facilities, announced today that it has closed on the acquisition of four community corrections facilities from a privately held owner of community corrections facilities and other government leased assets, for approximately $13.5 million, excluding transaction related expenses. The all-cash transaction closed August 27, 2015, and CCA did not assume any debt as part of the transaction.
The four acquired community corrections facilities have a capacity of approximately 600 beds and are leased to Community Education Centers, Inc. ("CEC") under triple net lease agreements that extend through July 2019 and include multiple five-year lease extension options. CEC separately contracts with the Pennsylvania Department of Corrections and the Philadelphia Prison System to provide rehabilitative and re-entry services to residents and inmates at the leased facilities.
"We are pleased to announce the acquisition of this asset portfolio consisting of four high quality residential re-entry properties," said Damon Hininger, CCA's chief executive officer. "The transaction introduces a strategic alternative to our traditional model of owning and operating residential re-entry facilities by providing a real estate-only solution that offers CCA attractive lease agreements accretive to earnings with a tenant that has long-standing contracts with a government partner to provide residential re-entry services."
This real estate-only acquisition builds on CCA's entry into the residential re-entry space, which began with the purchase of Correctional Alternatives, Inc. in 2013. The Company continues to actively pursue opportunities to deploy capital in this area.
Hininger added, "We believe the residential re-entry space is an attractive place for us to be overall, as it serves as a natural extension of the extensive re-entry programming and capacity solutions we offer in our correctional facilities, is aligned with needs we're hearing from governments around the country, and provides an attractive real estate investment."
CCA, a publicly traded real estate investment trust (REIT), is the nation's largest owner of partnership correction and detention facilities and one of the largest prison operators in the United States. Following the completion of our previously announced development projects, we will own or control 51 correctional and detention facilities, with a design capacity of approximately 71,000 beds, and manage 11 additional facilities owned by our government partners with a total design capacity of approximately 14,000 beds, in 18 states and the District of Columbia. CCA specializes in owning, operating and managing prisons and other correctional facilities and providing residential, community re-entry and prisoner transportation services for governmental agencies. In addition to providing fundamental residential services, our facilities offer a variety of rehabilitation and educational programs, including basic education, faith-based services, life skills and employment training and substance abuse treatment. These services are intended to reduce recidivism and to prepare offenders for their successful re-entry into society upon their release.
This press release contains statements as to our beliefs and expectations of the outcome of future events that are forward-looking statements as defined within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include, but are not limited to, the risks and uncertainties associated with: (i) general economic and market conditions, including the impact governmental budgets can have on our per diem rates, occupancy, and overall utilization; (ii) fluctuations in our operating results because of, among other things, changes in occupancy levels, competition, increases in cost of operations, fluctuations in interest rates and risks of operations; (iii) our ability to obtain and maintain correctional facility management contracts, including, but not limited to, sufficient governmental appropriations, contract compliance and as a result of inmate disturbances; (iv) changes in the privatization of the corrections and detention industry, the public acceptance of our services, the timing of the opening of and demand for new prison facilities and the commencement of new management contracts; (v) changes in government policy and in legislation and regulation of the corrections and detention industry that affect our business, including but not limited to, California's continued utilization of out of state private correctional capacity and the continued utilization of the South Texas Family Residential Center by U.S. Immigration and Customs Enforcement; (vi) our ability to meet and maintain REIT qualification status; and (vii) increases in costs to construct or expand correctional and other facilities that exceed original estimates, or the inability to complete such projects on schedule as a result of various factors, many of which are beyond our control, such as weather, labor conditions and material shortages, resulting in increased construction costs. Other factors that could cause operating and financial results to differ are described in the filings we make from time to time with the Securities and Exchange Commission.
CCA takes no responsibility for updating the information contained in this press release following the date hereof to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events or for any changes or modifications made to this press release or the information contained herein by any third-parties, including, but not limited to, any wire or internet services.
Managing Director, Investor Relations
Managing Director, Public Affairs
Source: CCA (Corrections Corporation of America)