Platinum Equity-backed prison phone and tablet company Aventiv Technologies LLC reported an improvement in quarterly earnings, according to people with knowledge of the matter, as the firm struggles to refinance its upcoming maturities.
(Bloomberg) — Platinum Equity-backed prison phone and tablet company Aventiv Technologies LLC reported an improvement in quarterly earnings, according to people with knowledge of the matter, as the firm struggles to refinance its upcoming maturities.
Aventiv, the parent company of brands including Securus Technologies and JPay, reported $156 million in revenue in the second quarter ended June 30, up about 5% year-over-year, said the people, who asked not to be identified because the company is private. Adjusted earnings before interest, taxes, depreciation and amortization came in at $66 million, up about 18% from the comparable period last year.
A representative for Platinum didn’t respond to requests for comment. A representative for Aventiv declined to comment.
The improvement in earnings is a bright spot for the company that’s running short on time to address its looming debt maturities. Aventiv’s revolving credit facility, of which $190 million was drawn as of the end of last year, comes due August 2024. Most firms try to refinance debt at least one year in advance.
In addition to the revolver, the company also has a roughly $1 billion leveraged loan due in November 2024, and another $283 million leveraged loan maturing in November 2025.
Its loan due November 2024 is currently trading at 83 cents on the dollar, according to data compiled by Bloomberg.
Aventiv tried to sell a $1.1 billion junk bond and leveraged loan deal in May to refinance these obligations, but was unable to do so despite Platinum pledging to add an additional $400 million of equity to reduce the company’s debt. The offering remains in limbo even though the private equity sponsor discussed potential changes to sweeten the transaction for investors.
A limited pool of debt buyers are willing to participate in financing deals by prison-related businesses due to concerns over environmental, social, and governance factors.
Securus, for instance, has been criticized in the past for charging as much as $25 for a 15-minute phone call from local jails and for requiring inmates to pay extra fees to open, fund and close accounts. Since 2019, however, Aventiv has reduced per-minute rates for phone calls by 21%, a spokesperson previously said.
Tom Gores-owned Platinum Equity, which bought the firm in 2017, has faced pressure in recent years for profiting off of incarceration and has said it is transforming the business, “to hold ourselves accountable and push our industry to answer to consumers and communities, as well as customers,” according to Aventiv’s website.
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