The GEO Group, Inc. (NYSE:GEO) ("GEO") provided an update today on its ongoing evaluation of a potential conversion into a real estate investment trust ("REIT") during its second quarter 2012 earnings conference call.
GEO has engaged the law firm of Skadden Arps as its legal advisors and Bank of America Merrill Lynch and Barclays Capital as its financial co-advisors to assist with the comprehensive review. In the middle of July 2012, GEO submitted a request to the United States Internal Revenue Service for a private letter ruling in order to better inform GEO's board of directors regarding the potential advantages and disadvantages of a REIT conversion and to determine whether GEO would qualify to convert to a REIT.
Once GEO and its advisors complete the comprehensive analysis being performed regarding a potential REIT conversion, GEO's board of directors will be adequately informed and in a position to determine whether to move forward with a REIT conversion. If GEO's board of directors concludes that it is in the best interest of GEO to proceed with the REIT conversion, GEO would seek to complete the conversion by the earliest conversion date which is January 2013; however, due to the short timeframe, the REIT conversion could be delayed until the next available conversion date which is January 2014. A conversion by GEO into a REIT would require the approval of GEO's shareholders.
The GEO Group, Inc. is the world’s leading diversified provider of correctional, detention, and residential treatment services to federal, state, and local government agencies around the globe. GEO offers a turnkey approach that includes design, construction, financing, and operations. GEO represents government clients in the United States, Australia, South Africa, and the United Kingdom. GEO’s worldwide operations include 20,000 employees, 109 correctional, detention and residential treatment facilities, including projects under development, and 75,000 owned and/or managed beds.