As previously announced by GEO, a special committee of the Board was formed consisting of all the independent directors of GEO (the “Independent Committee”), and the Independent Committee approved the sale of the GEO Care Business to members of GEO and GEO Care’s management teams (the "MBO Group") for a purchase price of $36 million, inclusive of normalized working capital in the GEO Care Business (the "GEO Care Divestiture"). The MBO Group will also be obligated to pay up to an additional $5 million in purchase price on a contingent earn-out basis if certain potential future contract awards are received by GEO Care.In connection with the GEO Care Divestiture, the MBO Group also entered 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 GEO Care Divestiture closed on December 31, 2012.
The GEO Group Completes Company Restructuring And Health Care Divestiture; Began Operating In Compliance With REIT Rules Effective January 1, 2013
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