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TheStreet Open House

The GEO Group Authorizes Special Dividend Of $350 Million, Takes Critical Steps Toward 2013 REIT Conversion

Stocks in this article: GEO

In connection with the GEO Care Divestiture, the MBO Group will enter into various arrangements with GEO which will result in approximately $2.6 million in annual payments and cost savings for GEO through a five-year support services agreement, a five-year licensing agreement, and annual general and administrative cost savings. Additionally, GEO expects to incur a non-cash charge of approximately $13 million to $17 million, net of tax, related to the write-off of goodwill, other intangible assets and intercompany debt during the fourth quarter of 2012 in connection with the GEO Care Divestiture. The parties expect to close the transaction by year-end 2012.

The Independent Committee engaged Davis Polk & Wardwell LLP and Delancey Street Partners, LLC as its legal and financial advisors, respectively, in its evaluation of the GEO Care Divestiture. Delancey Street Partners, LLC and Duff & Phelps LLC have each rendered fairness opinions to the Independent Committee and the Board of Directors stating that the consideration to be received by GEO in the GEO Care Divestiture is fair, from a financial point of view, to GEO.

Shareholder Vote

In order to ensure operation in accordance with the REIT rules, GEO plans on undertaking certain corporate reorganization actions including the inclusion of certain ownership limitations in GEO's charter documents, which will require the approval of GEO's shareholders. GEO expects to hold a special meeting of shareholders in the first half of 2013 for this purpose.

Principal Advisors

GEO has retained Skadden, Arps, Slate, Meagher & Flom LLP and Akerman Senterfitt as legal advisors, Bank of America Merrill Lynch and Barclays Capital as financial co-advisors, and Deloitte, LLP as accounting advisors to assist the Company in its REIT conversion.

Investor Conference Call Information

An investor conference call and simultaneous webcast has been scheduled for 11:00 AM (Eastern Time) on Friday, December 7, 2012 to discuss the steps GEO is taking to position itself for a 2013 REIT conversion. Hosting the call will be George C. Zoley, GEO's Chairman, Chief Executive Officer and Founder and Brian R. Evans, GEO's Chief Financial Officer. The call-in number for the U.S. is 1-866-788-0540 and the international call-in number is 1-857-350-1678. The participant pass-code for the conference call is 93556623. In addition, a live audio webcast of the conference call may be accessed on the Conference Calls/Webcasts section of GEO's investor relations home page at www.geogroup.com. A replay of the audio webcast will be available on the website for one year. A telephonic replay of the conference call will be available until January 7, 2013 at 1-888-286-8010 (U.S.) and 1-617-801-6888 (International). The pass-code for the telephonic replay is 32758887.

Investor Presentation

GEO has made available an investor presentation which can be obtained from GEO's investor relations home page at www.geogroup.com.

About The GEO Group, Inc.

The GEO Group, Inc. is the world's leading diversified provider of correctional, detention, and community reentry 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 18,000 employees, 101 correctional, detention and community reentry facilities, including projects under development, and 73,000 owned and/or managed beds.

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