CoreCivic Inc. is rapidly diversifying its business away from its primary corrections and detention lines and expanding in residential re-entry, real estate-only and other business segments.
CoreCivic earlier in 2017 took a look at 3M Co.'s electronic-monitoring business, which ultimately sold to Apax Partners for $200 million, President and CEO Damon Hininger said on a second-quarter earnings call, adding that other private real estate players with "mission-critical" properties leased to the government have approached the company about potential deals.
"We don't have a number out there yet. We want to get that pipeline built, and maybe get a couple of transactions done," Hininger said of the company's real estate-only business, part of its CoreCivic Properties segment. "But I think that also could be a catalyst to grow the CoreCivic Properties side."
Hininger later described the growth trajectory of the CoreCivic Properties segment as "variable," but he noted there could be a significant ramp-up in activity if current development projects pan out.
"We think, if we get a couple of these [development projects] across the finish line and really show from a development perspective that this could be a very good solution, [then] we could have really increased demand, not only at the state level, but also at the local level," the executive said.
For its residential re-entry business, CoreCivic Community, the company is aiming to expand at the rate of about one facility per quarter "for the next few years," Hininger said. The company's re-entry portfolio comprises about 5,600 beds across 29 properties at present.
"We've got a very well oiled process on sourcing potential target companies, doing the [due] diligence and closing quickly," Hininger said of the re-entry properties. "We are a very good buyer just because [we have] no financing contingencies and are able to close very quickly."
CoreCivic shares fell in early trading Aug. 8 after the company reported its quarterly results, but were up slightly on the day by press time.