CoreCivic Offloads Two Detention Centers for $1.5B, Nets $1.1B
CXW•CoreCivic sold its 2,560-bed California City and 1,994-bed Otay Mesa detention facilities to the U.S. Department of Homeland Security for $1.5B, yielding about $1.1B net after $400M in taxes and expenses. Net proceeds will retire $716.3M of bank credit and senior notes, with surplus for debt reduction and buybacks.
1. Asset Sale Details
On July 2, 2026, CoreCivic completed the sale of its 2,560-bed California City Detention Facility and 1,994-bed Otay Mesa Detention Center to the U.S. Department of Homeland Security for a combined gross price of $1.5 billion, comprising $732.6 million for California City and $739.2 million for Otay Mesa. After federal and state taxes and transactional costs of approximately $400 million, net proceeds totaled about $1.1 billion.
2. Debt Repayment and Capital Allocation
CoreCivic intends to apply the $1.1 billion net proceeds to retire $270 million on its revolving credit facility, $107.8 million on its initial term loan, $100 million on its incremental term loan, and repay $238.5 million of 4.75% senior notes maturing in 2027. Remaining funds will support general corporate purposes, including further debt reduction and potential share repurchases, subject to leverage ratio covenants.
3. Management Contracts and Growth Prospects
The Company expects to continue managing both facilities under existing ICE contracts expiring in August 2027 and December 2029 (with a five-year extension option), though terms may be revised. CoreCivic is also exploring additional facility sales with ICE and retains flexibility for acquisitions within its core government-solutions business to diversify cash flows and expand service offerings.
