General Dynamics’ CSRA acquisition cleared for take off as CACI withdraws bid

CACI International did an about-face Wednesday, announcing it would withdraw its $7.2 billion offer to acquire all outstanding shares of CSRA Inc.

The move came less than two weeks after the Arlington, Virginia-based federal contractor, which provides information solutions and services, offered to merge with Falls Church, Virginia-based CSRA for $44 per share in cash and stock.

It cleared the path for global aerospace and defense contractor General Dynamics, which entered into an agreement to acquire CSRA for $9.6 billion, or $40.75 per share in cash in February. The offer included assuming $2.8 billion of CSRA’s debt.

At the time of the announcement, the Associated Press reported that shares CSRA increased by 31 percent in midday trading.

That bid was increased to $41.25 per share in cash on March 20, according to filings from the Securities and Exchange Commission.

CACI CEO Kenneth Asbury said in a statement that the company would continue looking for “strategic opportunities.” The company generated $1.2 billion in federal revenue from 2014 to 2018, including $720 million from the Defense Department and $441 million from the Office of Personnel Management, according to Bloomberg Government.

“CACI continues to believe that CACI and CSRA would be the superior strategic and financial business combination,” Asbury said. “The potential for such a high value and transformational transaction certainly warranted our pursuit of this unique opportunity.”

From 2014 to 2018, CSRA earned about $2.2 billion in federal revenue, including  $1.19 billion from the DoD, and $863 million from the Homeland Security Department.

General Dynamics earned about $4.1 billion, of which $3.9 billion was from DoD, according to Bloomberg Government.