CSRA Rebuffs CACI Bid

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After receiving an unsolicited bid Sunday from CACI, CSRA and General Dynamics sweetened their original merger agreement.

Falls Church, Va.-based IT contractor CSRA and defense contractor General Dynamics have revised their original merger agreement following an unsolicited bid Sunday from rival contractor CACI International.

Under the new agreement, General Dynamics will acquire all outstanding shares of CSRA for $41.25 per share in cash—up from $40.75 per share in the original offer—putting the total value of the acquisition at $9.7 billion, including the assumption of $2.8 billion in CSRA debt.

The amended offer is less than CACI’s offer of  $44 per share.

In a statement, CSRA said its board of directors determined CACI “could not reasonably be expected to lead a company superior proposal,” essentially rebuffing the company’s bid. CACI has $4.4 billion in annual revenue, less than CSRA’s $5 billion; both companies have approximately 19,000 employees.

General Dynamics has more than $30 billion in annual revenue.

“CSRA’s Board of Directors took into account various factors, including among others, the value, certainty of value, certainty of closing and speed to closing of the General Dynamics offer, as amended, as compared to the CACI proposal,” CSRA said in a statement.

The tender offer expires on April 2.

CSRA won several key contracts in recent months, making it a more attractive acquisition target, including a $500 million cloud contract with the Defense Department and a $2.4 billion contract with the National Security Agency.