By Denny Jacob
Target Hospitality was notified the U.S. government will end an existing services agreement with the company's nonprofit partner.
The company, which provides rental accommodation with catering and hospitality services, said the existing Pecos Children's Center agreement with its nonprofit partner will be terminated effective immediately. The Woodlands, Texas, company provided facility and hospitality services to the partner through a lease and services agreement that is able to support up to 6,000 individuals.
Shares dived 33% to $6.30 in premarket trading. The stock was down less than 0.5% over the last year as of Friday's close.
Target Hospitality said it will retain ownership of its modular assets and real property under the services agreement. It noted its actively engaged in remarketing these assets for other opportunities including supporting the government's current immigration policies.
Target Hospitality is withdrawing its previously issued preliminary 2025 financial outlook given the termination notice and will provide an update in the future.
Write to Denny Jacob at denny.jacob@wsj.com
(END) Dow Jones Newswires
February 24, 2025 07:10 ET (12:10 GMT)
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