By Helen Thomas and Nicole Bullock
The Financial Times
Two US-listed prison operators yesterday said they had agreed to merge, as budget constraints among state and local governments increasingly prompt authorities to consider outsourcing correctional and detention facilities.
The Geo Group offered about $385m for Cornell Companies in a mixture of cash and stock, valuing the company at about $24.96 a share. The company will also take on about $300m of Cornell debt.
At that price, based on the companies’ closing prices at the end of last week, Geo, which also operates facilities in Australia and South Africa, is offering a 35 per cent premium for its smaller rival.
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