CoreCivic said it completed the July 2 sale of two California detention facilities for an aggregate gross price of $1.5 billion.
The assets were the 2,560-bed California City detention facility, sold for $732.6 million, and the 1,994-bed Otay Mesa detention center, sold for $739.2 million.
After roughly $0.4 billion in federal and state income taxes and transaction expenses, CoreCivic expects net proceeds of about $1.1 billion.
The company said it plans to use part of the cash to reduce debt. That includes paying down its bank credit facility, which currently carries $270.0 million on the revolving credit facility, $107.8 million on the initial term loan, and $100.0 million on the incremental term loan. CoreCivic also said it expects to repay the remaining $238.5 million outstanding on its 4.75% senior notes due October 2027.
CoreCivic said any remaining proceeds may go toward general corporate purposes, including additional debt reduction and share repurchases, subject to leverage limits in its credit documents.
The company said it expects to keep managing both facilities under existing ICE contracts, though those terms could change with the ownership transfer. The California City management contract runs through August 2027, while the Otay Mesa contract runs through December 2029 and includes a five-year extension option.
CoreCivic also said it has been in discussions with ICE about possible sales of additional detention facilities. Following these announcements, the company's shares moved 1.39%, and are now trading at a price of $31.46. If you want to know more, read the company's complete 8-K report here.
