General Dynamics Deal For CSRA Continues After CACI Withdraws Bid
March 28 2018 - 9:29AM
Dow Jones News
By Austen Hufford
CACI International Inc. withdrew its bid for CSRA Inc., paving
the way for the General Dynamics Corp. deal to continue.
Last week General Dynamics raised its offer for CSRA Inc. after
CACI submitted an unsolicited bid for the fellow federal
information technology provider.
CACI was trying to prevent a tie-up between General Dynamics and
CSRA as companies supplying the Pentagon and other government
agencies with IT and analytic services search for greater scale.
While the deal is now back on track, General Dynamics was forced to
up its offer for CSRA.
"We will continue our aggressive pursuit of strategic
opportunities, judiciously and without engaging in auctions at
uneconomic levels," CACI Chief Executive Kenneth Asbury said.
General Dynamics' latest bid was for $41.25 a share in cash,
valuing its target at $6.9 billion.
CACI wasn't able to overcome the bid from the much-larger
General Dynamics, which has a market capitalization of about $65.9
billion, compared with CACI's $3.67 billion.
Investors also expressed concerns about the debt CACI would have
had to take on to finance its deal.
General Dynamics has already secured antitrust approval for its
proposed deal, which would create one of the largest government IT
providers, with annual sales of almost $10 billion.
Some analysts have said that more deal making in the already
consolidated sector would continue as government departments opt to
award larger, enterprisewide contracts.
In premarket trading, CSRA shares fell 0.1% while CACI and
General Dynamics shares were inactive.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
March 28, 2018 09:14 ET (13:14 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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