CoreCivic said it completed the sale of two California detention facilities on July 2 for an aggregate gross price of $1.5 billion.
The company sold its 2,560-bed California City detention facility for $732.6 million and its 1,994-bed Otay Mesa detention center 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.
CoreCivic said it plans to use part of the cash to reduce debt. At the time of the announcement, its bank credit facility carried $270.0 million on the revolving credit line, $107.8 million on the initial term loan, and $100.0 million on the incremental term loan. It also expects to repay the remaining $238.5 million balance of its 4.75% senior notes due in October 2027.
The company said any remaining proceeds may go toward general corporate purposes, including additional debt reduction and share repurchases, depending on leverage limits in its credit agreement and 2029 notes indenture.
CoreCivic said it expects to continue managing both facilities under existing ICE contracts, though those agreements may be modified after the ownership change. The California City management contract expires in August 2027, while the Otay Mesa contract runs through December 2029 and includes a five-year extension option.
The company also said it is in discussions with ICE about the possible sale of additional detention facilities. Following these announcements, the company's shares moved -0.6%, and are now trading at a price of $30.845. Check out the company's full 8-K submission here.
