HIG Capital has secured a $200m dividend from its portfolio company TKC Holdings after the US prison-services vendor refinanced nearly $2.3bn of debt through a combination of junk bonds and leveraged loans, according to a report by Bloomberg.
The transaction included a $500m first-lien loan, a $1.1bn first-lien bond, and $675m of second-lien notes. While the deal was initially intended to fund a $100m dividend to HIG, market appetite allowed TKC to increase the offering and boost the payout to $200m, according to sources familiar with the private deal.
The refinancing extinguished all of TKC’s existing debt, including a payment-in-kind term loan, and was executed at pricing consistent with investor discussions. The two new high-yield bonds have since traded above par, reflecting strong secondary market interest.
TKC, which supplies commissary, food, telephone, and technology services to US correctional facilities, has grown revenues to $1.83bn on a trailing-twelve-month basis through September 2025, with EBITDA margins expanding to 16.4% from 10% in 2022. The company attributes this growth to contract wins, higher-margin product sales, and favourable renegotiations, with 79% of revenue secured under contracts through 2027. Adjusted EBITDA for the full year 2025 is projected at $317m, up 21% from the prior year.
The deal highlights HIG’s ongoing strategy of monetising portfolio assets while refinancing legacy debt, even in sectors like private corrections, which face financing challenges due to investor sensitivity and regulatory risks.
