Shares of modular accommodations and hospitality services provider Target Hospitality Corp. ( TH ) are trading higher on Thursday.

The company has entered into a five-year lease and services contract with CoreCivic, Inc. to restart operations at its Dilley, Texas facility.

This agreement marks the return of the South Texas Family Residential Center, which Target Hospitality ( TH ) managed from September 2014 to August 2024.

The reactivated facility will accommodate up to 2,400 individuals and is projected to provide more than $246 million in revenue through the five-year agreement, which concludes in March 2030.

Target Hospitality ( TH ) anticipates approximately $30 million of revenue to be realized in 2025.

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Target Hospitality ( TH ) will deliver facility and hospitality services to CoreCivic as part of the new Dilley Contract. The terms of this contract are similar to the prior agreement, including a guaranteed minimum revenue, regardless of occupancy.

“We are excited to continue our partnership with CoreCivic, leveraging the unique strengths of both organizations to support the U.S. government’s policy initiatives. The reactivation of this community illustrates the strategic importance of these assets and Target’s proven ability in providing these critical services and hospitality solutions,” said President and CEO Brad Archer.

The contract with CoreCivic is supported by an amended intergovernmental services agreement with the U.S. Immigration and Customs Enforcement.

Price Action: TH shares are trading higher by 6.32% at $5.89 at last check Thursday.

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