CACI Int'l Makes New Offer For CSRA In Effort To Top General Dynamics' Bid

(RTTNews) - CACI International Inc (CACI), information solutions and services provider to the federal government, said Sunday that it has made a proposal to acquire all outstanding shares of CSRA Inc. (CSRA), a provider of next-generation IT solutions and professional services to government organizations, for $44.00 per share in cash and stock. In addition, CACI announced that it increased its Fiscal Year 2018 guidance. Meanwhile, CSRA said that its board will carefully review and consider the Proposal.

CACI's proposal includes a cash component of $15 per share and a stock component in the form of CACI stock at a fixed exchange ratio of 0.184 shares of CACI common stock for each share of CSRA stock.

CACI noted that the acquisition proposal represents an 8% premium over the price CSRA's shareholders would receive in the announced transaction with General Dynamics (GD).

CACI expects to realize $165 million annually in net run-rate cost synergies—a substantially greater figure than the synergies contemplated by the GD transaction, affording both CACI's and CSRA's shareholders the opportunity to participate in additional value creation.

CACI noted that it has committed financing in place for the proposed transaction and therefore its proposal is not subject to any financing contingency. CACI's Board of Directors unanimously approved the proposal, which is not subject to any further due diligence. CACI expects that a transaction could close by July 31, 2018, subject to approvals by CACI's and CSRA's shareholders.

Separately, CSRA confirmed receipt of an unsolicited proposal from CACI International Inc. to acquire all of the outstanding shares of CSRA common stock for a combination of CACI common stock and cash, consisting of CACI common stock based on a fixed exchange ratio of 0.184 shares of CACI common stock for each share of CSRA common stock, and cash equal to $15.00 per share. The combination of cash and stock is equal to approximately $44.00 per share, based upon CACI's closing price on March 16, 2018 of $157.45 per share.

As previously announced on February 12, 2018, CSRA entered into an Agreement and Plan of Merger, with General Dynamics Corporation (GD) under which a wholly owned subsidiary of General Dynamics has agreed to acquire all outstanding shares of CSRA common stock for $40.75 per share in cash. Pursuant to the Merger Agreement, a wholly owned subsidiary of General Dynamics has commenced a tender offer to acquire all of the outstanding shares of CSRA common stock for $40.75 per share in cash. The Offer is scheduled to expire at 11:59 p.m., New York City time, on April 2, 2018.

CSRA noted that its board, in consultation with its legal and financial advisors, will carefully review and consider the Proposal.

CSRA said it remains subject to the Merger Agreement. The CSRA Board of Directors has not changed its recommendation that CSRA stockholders tender their shares of CSRA common stock pursuant to the Offer

In a separate release, CACI said today that it increased its Fiscal Year 2018 guidance.

As a result of strong operating performance on a number of programs throughout operations, particularly on our fixed price contracts, CACI increased net income and earnings per share guidance.

In addition, It increased the lower end of our annual revenue guidance range due to the increased certainty it has regarding operations as it approach fourth fiscal quarter.

CACI increased its fiscal year 2018 net income outlook to a range of $285 million - $291 million or $11.26 - $11.50 per share from $277 million - $283 million or $10.95 - $11.19 per share. Analysts polled by Thomson Reuters expect the company to report earnings of $11.18 per share for fiscal year 2018.

For 2018, CACI now expects revenue to be in the range of $4.40 billion - $4.50 billion, compared to prior outlook of $4.35 billion - $4.50 billion. Wall Street expected revenues of $4.45 billion.