Hedge Fund Pumps More Money into Corizon Health
Private prison medical care provider Corizon Health has received an injection of capital from shareholder BlueMountain Capital Management, a global hedge fund.
The infusion of cash allowed Corizon to pay down its debt and “accelerate business development and investment opportunities.” In other words, the company plans to obtain more contracts to provide medical services at prisons and jails. Corizon reportedly operates in 21 states and is responsible for the care of prisoners at 273 facilities.
BlueMountain manages more than $21 billion. As a result of an initial recapitalization led by the hedge fund in April 2017, Corizon “significantly reduced” its $300 million debt load. While details of the deal were not fully disclosed at the time, the investment reduced the stake of former main Corizon shareholder Beecken Petty O’Keefe & Company.
Then, in November 2018, BlueMountain invested another $100 million in Corizon in a debt-for-equity deal, lowering its debt to $90 million. Corizon has been investing in electronic health records, telemedicine, data analytics and other services. It has submitted bids in several states to privatize or take over currently privatized prison medical services, though it has faced numerous lawsuits as well as fines for contract violations, and recently lost its contract to provide healthcare in Arizona state prisons. [See, e.g.: PLN, Sept. 2017, p.32; Oct. 2015, p.20; March 2014, p.1].
Sources: nashvillepost.com, corizonhealth.com