Deal Dispatch: Prison Companies In Focus Post-Election, Tripadvisor Boasts $11B In Cash

Bankruptcy Block

Wellpath Holdings Inc., a major provider of healthcare services to jails across the U.S., is preparing to file for bankruptcy.

Owned by H.I.G. Capital, the Nashville, Tenn.-based company has struggled with debt and labor costs. Despite efforts, including a forbearance agreement with lenders, financial strains have persisted.

This move comes as prison stocks Geo Group GEO and CoreCivic CXW moved positively to the news that Donald Trump won the 2024 presidential election.

Meanwhile, Toronto-based Slang Worldwide Inc. SLNG SLGWF is entering receivership in Colorado and declared bankruptcy in Canada. Unable to repay amounts owed under its credit agreement, which matures on Nov. 15, 2024, Slang will likely dispose of or sell its assets through a receivership process.

New On The Block

Tripadvisor TRIP is currently exploring “strategic alternatives,” which is corporate jargon for a sale. According to CFO Mike Noonan, the company ended Q3 with $1.1 billion in cash. Should a firm make an offer, it would have to woo Liberty Media, which owns about 21% of Tripadvisor common stock — an approximate 57% voting interest.

KKR & Co. KKR wants to sell its stake in JB Chemicals & Pharmaceuticals Ltd. via a block trade in the market, per Bloomberg. The private equity firm is working with an investment bank as it considers selling about $750 million worth of stock in the Indian-listed company. The size of the deal could jump to $1 billion depending on demand.

Off The Block

Anglo American AAUKF has agreed to sell its 33.3% stake in the Jellinbah Group to Zashvin for $1.1 billion. Per the plan laid out earlier this year, the company is focusing on copper, iron ore, and crop nutrients. The joint venture holds a 70% interest in two major metallurgical coal mines in Queensland: Jellinbah East and Lake Vermont. Anglo did not operate these mines nor market their output.

Blackstone agreed to buy Retail Opportunity Investments Corp. ROIC, a U.S. shopping mall owner. The Stephen A. Schwarzman-run private equity firm valued the real estate investment trust at around $4 billion, including debt.

Air Transport Services Group ATSG is going private. Investment firm Stonepeak is acquiring the aircraft lessor for $3.1 billion, including debt.

Updates From The Block

Nippon Steel Corp. NISTF remains optimistic about finalizing its $14.1 billion acquisition of United States Steel Corp. X by the end of the year. The Japanese company is navigating opposition from unions and the Biden administration, while also facing potential hurdles from the recent election of Donald Trump, who plans to block the deal.

Brookfield launched a sale process for Aveo, a Sydney-based retirement home operator, in June. The Australian reports that the $3-billion company will likely not get sold until 2025.

Notes From The Block

Jim Cramer expressed optimism about a resurgence in M&A with the incoming Trump administration. Cramer predicts a more lenient approach to M&A approvals compared to the previous administration, which was known for its stringent antitrust scrutiny. The “Mad Money” host also highlighted that the regional banking sector could significantly benefit from increased M&A activity, allowing banks to grow by acquiring smaller entities or merging to form larger "super regionals.”

For last week’s column, click here.

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