Prediction: Private Prison Firms Won’t Be Hurt By Sentencing Reform


About 8 percent of U.S. prisoners are housed in privately run facilities, mostly run by Corrections Corporation of America or GEO Group. Both companies, which last year pulled in a combined $3.3 billion in annual revenue, have made moves to diversify into services that don’t involve keeping people behind bars, reports Bloomberg Business. GEO Group in 2011 acquired Behavioral Interventions, the world's largest producer of monitoring equipment for people awaiting trial or serving out probation or parole sentences. That followed GEO's purchase in 2009 of Just Care, a medical and mental health service provider which bolstered its GEO Care business that provides services to government agencies.

“Our commitment is to be the world's leader in the delivery of offender rehabilitation and community reentry programs, which is in line with the increased emphasis on rehabilitation around the world,” said GEO chairman and founder George Zoley in a recent earnings call. For $36 million in 2013, CCA acquired Correctional Alternatives, a company that provides housing and rehabilitation services that include work furloughs, residential reentry programs, and home confinement. “We believe we're going to continue to see governments seeking these types of services, and we're well positioned to offer them,” says CCA’s Steve Owen. Brian Ruttenbur of CRT Capital Group's research division, says that neither GEO or CCA will be significantly hurt by sentencing reform in the near future, primarily because the companies run many immigration detention facilities.

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