CoreCivic completed the sale of its 2,560-bed California City Detention Facility and its 1,994-bed Otay Mesa Detention Center to the U.S. Department of Homeland Security for an aggregate gross sales price of $1.5 billion. The California City Facility sold for $732.6 million and the Otay Mesa Facility for $739.2 million. After approximately $0.4 billion in taxes and transaction expenses, net proceeds are expected to be about $1.1 billion. The company plans to use a portion of the proceeds to repay outstanding debt, including $270.0 million on its Revolving Credit Facility, $107.8 million on the Initial Term Loan, $100.0 million on the Incremental Term Loan, and the remaining $238.5 million of its 4.75% senior notes due October 2027. Remaining net proceeds may be used for general corporate purposes, including additional debt repayments and share repurchases, subject to leverage ratio limits under its credit agreement and 8.25% senior notes indenture. CoreCivic expects to continue managing both facilities under existing ICE contracts, though terms may be modified and contracts can be terminated for non-appropriation or convenience.
CoreCivic IncCoreCivic sold two detention facilities for $1.5 billion, generating net proceeds of ~$1.1 billion to repay debt and potentially buy back shares.