General Dynamics has agreed to acquire government IT services provider CSRA for a total package worth about $9.6 billion. General Dynamics will pay $40.75 in cash for each share of CSRA stock and assume $2.8 billion in net debt from the latter firm. Both companies’ boards of directors approved the acquisition. The two firms expect the transaction to take place during the first half of 2018, subject to the antitrust clearance process and other closing conditions.
The deal will fold CSRA into General Dynamics’ information systems and technology business, its largest unit. It will result in a large combined IT platform capable of providing combat software and combat-ready computing equipment. The acquisition will be funded by means of General Dynamics’ debt financing and existing cash.
The acquisition is expected to help General Dynamics’ IT business to expand its client base and capabilities, and provide opportunities to deliver IT platforms and services to different customer groups—including federal civilian, defense, and intelligence sectors. The combined company will have about $9.9 billion in revenue, as well as double-digit earnings before interest, taxes, depreciation, and amortization margins.