For-profit prison services company looks to dump phone biz
Illustration: Aïda Amer/Axios
TKC Holdings, a portfolio company of H.I.G. Capital, is seeking creditor approval to spin off prisoner phone services company Inmate Calling Solutions via a management buyout.
Why it matters: When a for-profit prison services company like TKC decides a business has become too politically toxic to own, you know there's a serious problem. Particularly when it wants to divest so badly that it's willing to hurt its own credit-worthiness.
- TKS would help finance the deal via $280 million in new debt, including a $220 million PIK note.
The bottom line: "The controversial prison phone industry has come under fire for charging inmates as high as $25 for a 15-minute call... ICS and [rival] Securus, which was once owned by HIG but is now a portfolio company of Platinum Equity, dropped plans to merge in April 2019 after the Justice Dept and FCC raised concerns that the deal could harm competition," writes Bloomberg's Davide Scigiluzzo.