Jan 27, 2020

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.

Go deeper: Global merger and acquisition activity decreased in 2019

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Judge approves T-Mobile-Sprint merger

Illustration: Aïda Amer/Axios

A federal judge allowed the merger of T-Mobile and Sprint to move forward in a Tuesday decision, ruling against a coalition of state attorneys general who fought against the deal.

Why it matters: The deal, announced back in April 2018, reduces the number of national carriers from four to three, but creates a much larger rival to AT&T and Verizon, and was seen as vital for Sprint, which has continued to lose market share during the deal's long approval process.

Go deeperArrowUpdated Feb 11, 2020 - Economy & Business

Companies are behaving like it's a recession

Illustration: Aïda Amer/Axios

Despite historically low interest rates, U.S. companies are being unusually frugal, holding back on issuing new debt and pumping up their balance sheets with cash.

Why it matters: Historically, when interest rates are low and the economy is strong, companies have levered up to increase capital expenditures and buy assets in order to expand. The opposite is happening now.

Intuit reportedly nears $7 billion deal to buy Credit Karma

Illustration: Aïda Amer/Axios

Intuit is nearing a $7 billion deal to buy Credit Karma, a San Francisco-based provider of consumer credit-score checks and monitoring services, as first reported by the Wall Street Journal.

Why it matters: The combined company would hold a staggering amount of personal financial information. For consumers, that means much better recommendations and much bigger privacy concerns.