Buyout firm Castle Harlan Inc. is in talks to sell Securus Technologies Inc., the provider of video and audio communication equipment for U.S. prisons, for about $640 million, said people familiar with the matter.
Castle Harlan is negotiating to sell the company to private-equity firm ABRY Partners LLC, said the people, who asked not to be named because the process is private. Boston-based ABRY, which manages $3.5 billion, is seeking to raise $490 million to help finance the purchase and pay down existing debt, said one of the people.
Securus, based in Dallas, installs and manages phone systems and features such as voicemail for more than 2,000 prisons nationwide. Adding Securus to the roster would help ABRY bolster its portfolio of communications companies, which already includes RCN Cable and JAB Broadband, ABRY’s website shows.
After the acquisition, Securus’s total debt would be about 5.8 times its earnings before interest, taxes, depreciation and amortization, said one of the people.
New York-based Castle Harlan bought Securus in 2011 for about $440 million, that person said. Debbie Johnson, chief financial officer at ABRY, declined to comment, while a representative at Securus didn’t immediately return a call requesting comment.