Immigration solutions expand further with the acquisition of the Farmville Detention Center for $67 million by CoreCivic.
In a breakthrough move, CoreCivic, a major player in the correctional facilities sector with the NYSE ticker CXW, has announced its intentions to purchase the Farmville Detention Center, an immigration and naturalization service located in the historic town of Farmville, Virginia, for a cool $67 million. The deal is set to go down by grabbing 100% of the membership interests, as mentioned in a recent press release.
The Farmville Detention Center, consisting of 736 beds, is a facility that found its roots in 2010 and predominantly caters to adult male noncitizens through an agreement with U.S. Immigration & Customs Enforcement (ICE). The acquisition price represents a prudent multiple of less than 2x the annual revenue.
CoreCivic plans to fund this deal using cash on hand and its revolving bank credit facility, demonstrating their commitment to this strategic move. The acquisition is expected to generate approximately $40 million in annual revenue, making it a lucrative move for the company.
The existing ICE contract, scheduled to run until March 2029, provides a stable source of revenue, offering a sense of predictability for the company's financial outlook. However, integrating the facility's existing workforce of over 200 people into CoreCivic's current workforce may present operational challenges.
CEO of CoreCivic, Damon T. Hininger, emphasized the strategic value of this acquisition in expanding their immigration solutions, citing the facility's long-standing relationship with ICE and the potential for continued demand. The transaction is scheduled to close on July 1, 2025, subject to the usual closing conditions.
Looking ahead, this acquisition is expected to bolster CoreCivic's portfolio as they continue to navigate the ever-evolving landscape of immigration services, leveraging their resources to provide efficient and effective solutions.
CoreCivic's acquisition of the Farmville Detention Center for $67 million, expected to close in July 2025, marks a strategic investment in real-estate and business expansion, as the company plans to use its cash on hand and revolving bank credit facility for the deal. With the potential for approximately $40 million in annual revenue, this move in the finance sector also positions CoreCivic to further develop its immigration solutions and maintain a substantial presence in the investing landscape.
