General Dynamics To Buy CSRA In $9.6 Bln Deal

(RTTNews) - General Dynamics (GD) said Monday that it agreed to buy CSRA Inc. (CSRA) for $40.75 per share in cash. The transaction is valued at $9.6 billion, including the assumption of $2.8 billion in CSRA debt.

In the pre-market trade, CSRA is trading at $39.20 up $8.38 or 27.19 percent.

General Dynamics expects the transaction to be accretive to GAAP earnings per share and to free cash flow per share in 2019, and expects to generate estimated annual pre-tax cost savings of approximately 2 percent of the combined company's revenue by 2020.

As per the terms of the agreement, which has been unanimously approved by the Board of Directors of both companies, a subsidiary of General Dynamics will commence a cash tender offer to purchase all of the outstanding shares of CSRA common stock for $40.75 per share in cash.

The tender offer is subject to customary conditions, including antitrust clearance and the tender of a majority of the outstanding shares of CSRA common stock.

Following successful completion of the tender offer, General Dynamics would acquire all remaining shares not tendered in the offer through a merger at the same price as in the tender offer. General Dynamics expects to complete the acquisition in the first half of 2018.

General Dynamics anticipates financing the transaction through a combination of available cash and new debt financing. Upon completion of the transaction, General Dynamics anticipates retaining strong credit ratings with net debt of approximately $10.5 billion.

CSRA is government IT business providing next-generation technology solutions to federal customers. CSRA's solutions are organized into six service areas: cyber; data and analytics; digital platforms; digital services; enterprise business services; and intelligent business process services. The company's 2017 revenue was $5 billion.