G4S offloads youth detention centres across US in £45.2m deal
Security and outsourcing giant G4S has struck a 56.5 million US dollar (£45.2 million) deal to offload its youth detention centres across America.
The firm's youth services arm, which has 31 facilities in Florida, Texas and Tennessee, has been snapped up by BHSB Holdings.
The move comes as the FTSE 250 firm presses ahead with a turnaround plan, which was launched three years ago after it was sent reeling by a prisoner-tagging scandal in 2013 and its failure to supply adequate security for the London Olympics in 2012.
Group chief executive Ashley Almanza said: "As previously announced, the sale of our US Youth Services business is part of our portfolio management programme initiated in 2013 to improve our strategic, commercial and operational focus."
G4S Youth Services, which employs 2,000 staff and works with around 1,500 young people, saw pre-tax profits shrink by 9% to 5.1 million US dollars (£4.1 million) for the year to the end of December 2016.
It holds 24 contracts running for around three to five years, providing services such as alternative education schools, behavioural and mental health counselling, and substance abuse schemes.
It has gross assets of 21.5 millions US dollars (£17.2 million), the company said.
The operation's senior management staff will shift across to the new business once the deal is complete.
G4S hailed "significant progress" in March when it posted a surge in annual profits following an overhaul.
The firm reported a 13.9% hike in underlying pre-tax profits to £352 million for 2016, with revenues also coming in 6.3% higher.
It also notched up £2.5 billion of new contracts in 2016 and said it had a pipeline of new business worth £6.8 billion a year.
The group has offloaded 29 businesses since 2013, including four closed and 12 sold in 2016 alone, with another 27 earmarked for sale or closure.
US President Donald Trump plans to boost defence spending by a record 54 billion US dollars (£43.2 billion), while G4S could also pick up new contracts to help with America's immigration policy changes.