NATIONWIDE — Today, Worth Rises published an analysis of recently-released financial statements for Aventiv Technologies – parent company of Securus Technologies – revealing that the prison telecom corporation capitalized on the COVID-19 public health crisis to rake in massive gains at the expense of struggling families.
“Last year, as the pandemic began to spread and families were struggling to stay in touch with their incarcerated loved ones following the suspension of visits, Securus made historic profits hand over fist. Prison phone call volume across the nation skyrocketed and families were forced to rely solely on the price-gouging corporation’s expensive phone calls to stay in touch. It is morally repugnant,” said Bianca Tylek, Executive Director of Worth Rises. “Worse yet, these financials reveal that Platinum Equity has paid itself $35.3 million since acquiring Securus in 2017 — contrary to Tom Gores’ claims that he has been reinvesting the profits in ‘improving’ Securus. We have lots of questions now, and Tom Gores owes the public a lot of answers.”
During the pandemic, every business line – phone calls, video calls, tablets, payment services, and electronic monitoring – experienced growth. Data shows that Securus’ revenues grew 10 percent, or $69.5 million, to $767.5 million, in 2020 compared to only 2 percent in 2019. Securus’ operating income also more than doubled to $80.3 million, EBITDA grew 41 percent to $209.2 million, and net cash flow from operating activities grew nearly five-fold to $133.5 million between 2019 to 2020. Coincidentally, investments in infrastructure decreased by 46 percent over the last year. Platinum Equity, helmed by Detroit Pistons owner Tom Gores, took a $2.3 million payout on top of its annual $10.2 million management fee in 2020.
Before the pandemic, Securus’ debt traded at distressed levels as low as low as 47 cents on the dollar, suggesting that the corporation could be worth as little as $693 million, a significant departure from the $1.6 billion Platinum Equity paid for the corporation in November 2017. Today, Securus’ valuation has bounced back to as much as $1.5 billion.
Securus, and other prison telecom vendors, were effectively barriers to communication for families and their incarcerated loved ones through the pandemic. Families that were disproportionately Black, brown, and cash-poor – the same families disproportionately impacted by the health and economic fallout of the pandemic – scrambled to find ways to connect with their loved ones inside. And they did, to Securus’ benefit. Read Worth Rises’ full analysis here.