CACI offers higher bid to breakup General Dynamics Agreement with CSRA

CACI International Inc. (NYSE: CACI) bidded $7.2 billion to buy CSRA Inc. (NYSE: CSRA) to breakup General Dynamics Corporation (NYSE: GD) bid of $6.8 billion on Sunday. CSRA shares opened 1.06 percent higher on Monday following the announcement over the weekend.

CACI offered to acquire its peer competitor for $44 per share, consisting of a cash component of $15 per share and a stock component at a fixed ratio of 0.184 shares of CACI common stock for each CSRA stock.

CACI says the acquisition will unite two businesses to provide customers with solutions to link domain and mission knowledge with industry-leading enterprise support offerings. CACI says it will help further help the company grow and develop in market areas to improve its positions.

General Dynamics entered into an agreement to acquire CSRA last month, causing CSRA shares to jump 31 percent then. The merger between the two was to create a stronger IT solutions for government technology services, pending U.S. President Donald Trump’s military spending budget proposal.

The acquisition represents an 8 percent premium over the price of General Dynamic’s offer. CACI says its bid expects to realize $165 million annually in net run-rate cost synergies, which the company claims its “substantially greater” than GD’s bid.

General Dynamics released a statement shortly after CACI’s bid saying that it intends to continue with its offer for CSRA and that its proposed bid is far more superior than CACI’s bid for shareholders.

CACI announced it another statement that it will be raising its fiscal year 2018 guidance due to strong performance. The company raised its revenue from the previous range of $4.35 billion and $4.5 billion to $4.4 billion and $4.5 billion. Net income was raised from the range of $277 million and $283 million to $285 million and $291 million. Diluted EPS was raised from the range of $10.95 and $11.19 to $11.26 to $11.50.

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