Platinum Equity-owned prison telecom company Aventiv defaults, faces uncertain future

Private equity firm Platinum Equity owns prison and jail telecom contractor Aventiv Technologies (formerly Securus). The largest and one of the most predatory providers of phone and communications services to U.S. jails, prisons, and detention centers, Aventiv relentlessly preys upon incarcerated people and their families to bolster their bottom line.

Despite this predatory behavior, Aventiv has been unable to service its mountainof debt, leading to a recentdefault. Post distressed exchange, Aventiv’s debt now includes:

• $225 million fully-drawn revolving credit facility, currently due July 2025
• $1.1 billion first-lien term loan due July 2025
• $283 million second-lien leveraged loan due November 2025

After months of failed refinancing efforts and repeated creditdowngrades, Bloomberg reported that Aventiv has recently reached a deal with lenders on the condition that Platinum Equity sells Aventiv within a year. The deal extends Aventiv’s maturity dates by only eight months and includes an additional $40 million in new debt issued by lenders and Platinum Equity. If Platinum fails to find a buyer, Bloomberg notes that Aventiv may “pivot to restructuring its debt through a bankruptcy filing or otherwise rework its obligations outside of court.”

Platinum tried to sell Aventiv to a SPAC in 2021, but the deal fell through. Since then, the company has faced intensifying public criticism of its exploitative business model and five states have passed legislation to make prison and jail communication free. Just last week, Aventiv and Platinum Equity were named in a class action lawsuit along with a Michigan county alleging the restriction of in-person jail visits between children and incarcerated parents forces families to rely on Aventiv’s expensive video calling services. Further, in the second half of 2024, the Federal Communications Commission will release new rules as required by the Martha Wright-Reed Act that expanded its regulatory authority over prison and jail phone calls as well as never-before-regulated video services. Bottom line, it is not a pretty picture, and the picture is about to get worse.