General Dynamics acquired government IT contractor CSRA for 6.8 billion USD
The US aerospace and defense multinational corporation General Dynamics acquired government IT contractor CSRA for 6.8 billion USD, in attempt to expand its information technology unit’s customer base. Under the definitive agreement signed by the both companies, General Dynamics will acquire all outstanding shares of CSRA for 40.75 USD per share in cash. General Dynamics expects to fund the deal through a combination of available cash and new debt financing.
CSRA generated about 94 percent of its revenue in the fiscal years ended March 2017 from sales to the U.S. government either as a prime contractor or subcontractor.
General Dynamics said it expects the deal to add to its earnings per share and free cash flow per share in 2019 and generate annual pre-tax cost savings of about 2 percent of the combined company’s revenue by 2020.
“The acquisition of CSRA represents a significant strategic step in expanding the capabilities and customer base of GDIT”, said the Chairman and CEO of General Dynamics, Phebe Novakovic. “We see substantial opportunities to provide cost-effective IT solutions and services to the Department of Defense, the intelligence community and federal civilian agencies. The combination enables GDIT to grow revenue and profits at an accelerated rate. It will allow us to deliver even more innovative, leading-edge solutions to our customers”, added he.
General Dynamics is the producer of Gulfstream jets, tanks and US Navy ships. It is the world’s fifth-largest defense contractor by revenues. The company’s information systems and technology business is its biggest unit and provides combat software solutions and combat-ready computing equipment.