Big Deal: General Dynamics Buys CSRA


General Dynamics just became an even bigger player in the federal IT space with its purchase of CSRA.

Defense contractor General Dynamics dramatically improved its business footprint across the federal government Monday, announcing a $9.6 billion acquisition of CSRA.

General Dynamics’ acquisition of one of its largest rivals elevates the company’s annual revenue to $9.9 billion, just shy of Leidos, which became the $10 billion top dog in federal IT two years ago after buying Lockheed Martin’s IT business..

Under the deal, General Dynamics will spend $6.8 billion, assuming $2.8 billion in CSRA debt.

"The acquisition of CSRA represents a significant strategic step in expanding the capabilities and customer base of GDIT," said Phebe Novakovic, chairman and chief executive officer of General Dynamics, in a statement. "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."

CSRA’s purchase comes after the company had a big year, capturing $5 billion in revenue and landing several notable contracts. Perhaps most importantly, the National Security Agency awarded CSRA $2.4 billion to develop one of the portions of its classified Groundbreaker program. CSRA also captured the Defense Department's milCloud 2.0 contract, valued at half a billion dollars.

 Larry Prior, CEO of CSRA, said General Dynamics new portfolio “creates a clear, differentiated leader in the Federal IT sector, with a full spectrum of enterprise IT capabilities.”

“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,” Prior said in a statement.

A spokesperson for General Dynamics said the companies will continue to operate as separate entities until the acquisition has gone through regulatory reviews, which could take several months.