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 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 each rendered fairness opinions to the Independent Committee and the Board of Directors stating that the consideration received by GEO in the GEO Care Divestiture is fair, from a financial point of view, to GEO. 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.
Safe-Harbor StatementThis press release contains forward-looking statements regarding future events and future performance of GEO that involve risks and uncertainties that could materially affect actual results including statements regarding the benefits of REIT status, the estimate of annual payments and cost savings to GEO and the estimate of a non-cash charge, net of tax, during the fourth quarter of 2012 in connection with the GEO Care Divestiture. Factors that could cause actual results to vary from current expectations and forward-looking statements contained in this press release include, but are not limited to: (1) GEO's ability to meet its financial guidance given the various risks to which its business is exposed; (2) GEO's ability to declare future cash dividends; (3) GEO's ability to successfully pursue further growth and continue to create shareholder value; (4) risks associated with GEO's ability to control operating costs associated with contract start-ups; (5) GEO's ability to timely open facilities as planned, profitably manage such facilities and successfully integrate such facilities into GEO's operations without substantial costs; (6) GEO's ability to win management contracts for which it has submitted proposals and to retain existing management contracts; (7) GEO's ability to obtain future financing on acceptable terms; (8) GEO's ability to sustain company-wide occupancy rates at its facilities; (9) GEO's ability to access the capital markets in the future on satisfactory terms or at all; and (10) other factors contained in GEO's Securities and Exchange Commission filings, including the Form 10-K, 10-Q and 8-K reports.