Geo Group (NYSE:GEO) Acquisition of Behavioral Interventions Long-term Play

The acquisition of Behavioral Interventions by Geo Group (NYSE:GEO) caught almost everyone off guard, but it really didn't turn too many heads, and is considered a good fit for the long term, and going along with the strategy of GEO to become a one-stop shop in its sector.

Barclays (NYSE:BCS) said, "Yesterday (Tuesday), GEO announced a $415M acquisition of Behavioral Interventions (BI), a leading provider of electronic monitoring services. While the timing and size of the deal was unexpected, we do view BI as a good strategic fit for GEO's long-term goal of being the "Continuum of Care" in the correctional industry (the 'one-stop shop')...Despite the transformational nature of this acquisition, we do not view it as an indication of any change in the growth opportunities for the traditional 'Beds' business...Finally, despite the increased leverage, we are comfortable with GEO's ability to naturally de-lever over time and fund future growth projects (closer to 1H'12)."

Barclays maintains an "Overweight" on The Geo Group, which closed Wednesday at $24.49, up $0.06, or 0.25 percent. They raised their price target on them from $30 to $32.