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PLN mentioned in article on sale of Global Tel*Link by Goldman Sachs

NY Post, Jan. 1, 2011.
PLN mentioned in article on sale of Global Tel*Link by Goldman Sachs - NY Post 2011

Goldman’s jail break


Last Updated: 11:16 PM, October 7, 2011

Posted: 11:16 PM, October 7, 2011

There’s gold in them thar prisons.

A Mobile, Ala., private equity company is about to announce a deal to purchase the largest prison phone system in the US, a source close to the situation told The Post, making it one of the few leveraged loan deals to succeed in an almost frozen sector of the finance world.

Terms of the deal could not be determined, but Veritas Capital, another PE firm, and Goldman Sachs, which own the prison phone company called Global Tel Link, were asking $800 million for the operation.

American Securities Capital is expected to announce in a matter of days that it is buying GTL, sources said.

If Veritas and Goldman are able to fetch anywhere close to their asking price, they would pocket a profit of about 450 percent after owning GTL for less than three years, according to The Daily Deal.

GTL provides all prison phone service in Connecticut and New Jersey state prisons, and in Nassau County jails.

Inmates make collect calls, and the people who accept the charges pay GTL, mostly through pre-paid phone cards.

GTL operates monopolies and charges higher-than-normal calling card rates -- which could be one reason it was able to attract bank financing while other prospective deals are withering on the vine.

Some have accused GTL and its rivals of price-gouging.

GTL in Connecticut charges $3.95 plus 89 cents a minute for interstate calls, according to Paul Wright, executive director of the Human Rights Defense Center.

Among the many complaints Wright said he hears is GTL and its smaller competitors require people to pay $4.50 to get $25 or $50 pre-paid cards before they can accept collect calls from prisoners, and GTL does not rebate unused dollars.

Goldman declined comment. American Securities and Veritas did not return calls.