CSRA Inc (NYSE: CSRA) is having an incredibly strong day in the market today, and for good reason. The company announced that it has entered into an agreement to be acquired by General Dynamics at an incredible premium. Of course, this led to excitement among investors, sending the stock screaming for the top. Today, we’ll talk about the acquisition news, what we’re seeing from the stock, and what we’ll be watching for with regard to CSRA ahead.
CSRA Gains On Acquisition News
As mentioned above, CSRA is having an overwhelmingly strong day in the market today after announcing that it has entered into an agreement to be acquired. In a press release issued early this morning, the company announced that it has entered into a definitive agreement with General Dynamics. Under the terms of the agreement, General Dynamics will acquire the company at a price of $40.75 per share in an all-cash transaction. The total transaction value comes to a whopping $9.6 billion. This figure includes the assumption of $2.8 billion in debt. In a statement, Phebe Novakovic, Chairman and CEO at General Dynamics, had the following to offer:
The acquisition of CSRA represents a significant strategic step in expanding the capabilities and customer base of GDIT… CSRA’s management team has created an outstanding provider of innovative, next-generation IT solutions with industry-leading margins. 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 combination enables GDIT to grow revenue and profits at an accelerated rate. It will allow us to deliver even more innovative, leading-edge solutions to our customers.
The above statement was followed up by Larry Prior, CEO and President at CSRA. Here’s what he had to offer:
Our combination with General Dynamics represents an excellent outcome for CSRA’s stockholders, employees and customers. It builds on strong shared values, culture and a passion for serving our customers’ missions. 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.
I am very pleased to welcome CSRA’s talented leadership team and employees. This combination brings together two industry leaders with highly complementary capabilities to create a strong business with approximately $9.9 billion in revenue and double-digit EBITDA margins in the consolidating Government Technology Services sector.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that it’s important to keep a close eye on the news. In this particular case, the news had to do with an acquisition, the type of news that generally causes the largest movements in the market. So, it’s no surprise to see that the stock is making a run for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:58), CSRA is trading at $40.49 per share after a gain of $9.67 per share or 31.38% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
What WE’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on the acquisition news surrounding CSRA. While the agreement has been signed, it is still subject to customary closing conditions as well as regulatory approval. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!