General Dynamics to acquire CRSA for $6.8bn
US defense contractor General Dynamics has revealed that it has agreed to acquire government information technology service provider CRSA in the aim of expanding its own IT service unit.
“The acquisition of CSRA represents a significant strategic step in expanding the capabilities and customer base of General Dynamics Information Technology (GDIT)," said Phebe Novakovic, Chairman and Chief Executive Officer of General Dynamics. “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 acquisition includes a $40.75-per-share cash offer, with the total $6.8bn representing a 32% premium on CRSA’s unaffected share price, in addition to General Dynamics assuming $2.8bn in debt, valuing the deal at $9.6bn.
“We believe that this combination creates a clear, differentiated leader in the Federal IT sector, with a full spectrum of enterprise IT capabilities, including unique depth in Next-Gen offerings in conjunction with our commercial IT alliance partners,” said Larry Prior, Chief Executive Officer and President of CSRA.
Spending on federal sector IT services is forecast to increase throughout 2018, having been in decline for a number of years, with President Donald Trump expected to bolster the US military budget.