Merger to create prison health giant

Merger to create prison health giant

Valitás Health Services Inc., a Creve Coeur-based provider of health care in prisons and jails, announced Thursday its plan to acquire Tennessee-based America Service Group Inc., another leading provider of prison health services.

The combined company will have about 11,000 employees and serve more than 400 correctional facilities in 31 states, with revenue estimated this year of about $1.4 billion, company officials said. That makes it the largest U.S. contractor of health services in jails and prisons.

"We're doing this to take advantage of the growth opportunities that are available in the marketplace and to blend the companies and take advantage of their relative strengths," said Dick Miles, Valitás' chairman and chief executive. "We think that a lot of states are going to be considering outsourcing correctional health care to companies like ours as a way to address both financial and quality issues."

Today, less than half the nation's correctional health care has been outsourced.

Valitás will acquire America Service Group for $26 per share, or about $250 million. The transaction is subject to antitrust review by the Justice Department and the approval of America Service Group shareholders.