Corrections Corp. of America said Monday morning it has acquired a community corrections services provider for $36 million. The acquisition, which closed at the end of July, expands CCA's offerings into work furloughs, home confinement and other programs.
Correctional Alternatives Inc. was founded in 1987 and has managed housing and rehabilitation programs for the Bureau of Prisons since 1990 and with the County of San Diego since 1995. The company owns a 120-bed facility and controls a 483-bed facility through a long-term lease and is working with about 450 residents and inmates.
"The long-standing contracts and difficult to replace infrastructure assets we obtain through this acquisition aligns well with our strategy of providing real estate to existing and potential government partners," said CCA President and CEO Damon Hininger. "Through this strategic acquisition, we believe we can grow and expand upon the community corrections business that CAI has developed, primarily with other counties in California as they seek solutions to the challenges of realignment on a long-term basis, as well as with the BOP."
The deal will add $14 million to CCA's top line and $5 million in EBITDA on an annual basis. The company's executives expect it to be neutral to this year's earnings per share but add 3 cents in 2014. Analysts now expect the company to earn $2.02 next year.
Shares of CCA (Ticker: CXW) ended last week's trading at $33.19. They're down about 10 percent in the past three months.