Deal closes for prison company
GEO pays $62 million for Correctional Services.
STAFF REPORT
SARASOTA -- Correctional Services Corp. is no more.
The GEO Group, based in Boca Raton, has closed its $62 million deal for the Sarasota-based private prison management company. GEO ended up paying $6 per share and assuming $124 million in Correctional Services debt.
The local company's founder, James Slattery, plans to continue to run Youth Services International, which runs detention operations for youthful offenders, out of Sarasota. That unit manages programs at 17 centers with 1,300 beds.
Slattery paid $3.75 million for the business. GEO will continue to own the 26-acre property in Newport News, Va., that housed one of Youth Services' juvenile operations.
Contingent on the closing was a settlement by Correctional Services on a $38.8 million judgment that held the company responsible for the death of Bryan Dale Alexander, an 18-year-old inmate at a Texas boot camp.
The terms were held confidential, but the Sarasota company paid $2.7 million toward the settlement, with the rest made up by its liability insurers, which initially balked at paying the award.
A Texas jury in August 2003 found CSC and a nurse at the now-closed Mansfield boot camp responsible for Alexander's death. He died of a rare penicillin-resistant form of pneumonia.
The judgment against CSC and nurse Knyvett Reyes included $35 million in actual damages, $750,000 in punitive damages and more than $2.4 million in interest.
Correctional Services' former adult division owns or operates 15 centers with 7,500 beds. GEO manages 41 prisons and jails with 36,000 beds in the United States, Australia, South Africa and Canada.
GEO's shares, which trade on the New York Stock Exchange, were selling for $22.01 at the close of regular trading Monday, up 97 cents, or about 4.6 percent.
