Saturday, November 14, 2015

Securus Had Multiple PEU Owners.


The Intercept reported:

" ... an anonymous hacker who believes that Securus is violating the constitutional rights of inmates — comprise over 70 million records of phone calls, placed by prisoners to at least 37 states, in addition to links to downloadable recordings of the calls. The calls span a nearly two-and-a-half year period, beginning in December 2011 and ending in the spring of 2014. 

Particularly notable within the vast trove of phone records are what appear to be at least 14,000 recorded conversations between inmates and attorneys, a strong indication that at least some of the recordings are likely confidential and privileged legal communications — calls that never should have been recorded in the first place. 
Who owned Securus between December 2011 and spring of 2014?  H.I.G Capital owned Securus from 2004 to May 2011.  H.I.G and Securus buyer Castle Harlan waited until November 2011 to announce the deal.  That press release stated:

Castle Harlan, Inc., a leading global private equity investment firm, today announced the acquisition of Securus Technologies, Inc. from H.I.G. Capital, a private equity firm based in Miami, FL. The transaction closed on May 31, 2011.

Securus Technologies is the leading provider of secure inmate telecommunications for the corrections industry, serving 2,200 facilities across 44 states, the District of Columbia and Canada. It installs and centrally manages state-of-the-art call management and communications systems for use by prisons and jails, and offers a variety of convenient payment products and services to inmates and their friends and family members.

“We are excited to be partnering with Castle Harlan for the next stage of the company’s growth,” said Richard A. Smith, CEO and President of Securus Technologies. “With the addition of Castle Harlan’s broad business experience and financial expertise, we are confident that our company’s future operations will continue to be greatly enhanced.”

Castle Harlan said that the current management of Securus Technologies, which has been highly successful at Securus and in prior roles in the telecommunications industry, will be partners in the investment and will remain in place.

“Securus is the technological leader in its field and has an exceptional management team with great depth and experience in telecommunications. We believe that Securus is uniquely positioned to continue to grow in the corrections market,” said William Pruellage, Co-President of Castle Harlan.

“Securus’ competitive advantages have already started to produce results during our ownership and we are confident that the management team will lead the company to continued growth and success,” said Anand Philip, a Castle Harlan Managing Director.
Harlan Castle sold its stake in Securus to Abry Partners in March 2013. 

Abry Partners is acquiring a 66.9% stake in prison phone operator Securus Holdings Inc. from Castle Harlan in a transaction not officially announced by the buyer, but revealed in regulatory filings. 
 
Also taking additional minority stakes in Securus are HarbourVest Partners, Redoak Investments LLC and Mesirow Financial Capital Partners.

The deal could value the target at more than $700 million.  New York-based Castle Harlan bought Securus in 2011 for about $440 million.
Securus went through several sales just before and during the period in question. Each buyers aim was to fluff and flip the company.  Profits over principle is a familiar PEU theme, as is lack of government oversight and accountability.