General Dynamics’s $9.6 Billion Acquisition of CSRA

Stone Key Group, LLC served as exclusive financial advisor to General Dynamics and Jenner & Block LLP served as legal counsel. Evercore and Macquarie Capital served as financial advisors to CSRA and Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel. Debevoise & Plimpton LLP is advising Evercore as financial advisor to CSRA

General Dynamics (NYSE: GD) and CSRA (NYSE: CSRA) have entered into a definitive agreement under which General Dynamics will acquire all outstanding shares of CSRA for $40.75 in cash. The transaction is valued at $9.6 billion, including the assumption of $2.8 billion in CSRA debt.

General Dynamics expects the transaction to be accretive to GAAP earnings per share and to free cash flow per share in 2019, and expects to generate estimated annual pre-tax cost savings of approximately 2 percent of the combined company’s revenue by 2020.

Under the terms of the agreement, which has been unanimously approved by the Board of Directors of both companies, a subsidiary of General Dynamics will commence a cash tender offer to purchase all of the outstanding shares of CSRA common stock for $40.75 per share in cash. The tender offer is subject to customary conditions, including antitrust clearance and the tender of a majority of the outstanding shares of CSRA common stock. Following successful completion of the tender offer, General Dynamics would acquire all remaining shares not tendered in the offer through a merger at the same price as in the tender offer. General Dynamics expects to complete the acquisition in the first half of 2018.

Headquartered in Falls Church, Virginia, General Dynamics (NYSE: GD) is a global aerospace and defense company that offers a broad portfolio of products and services business aviation; combat vehicles, weapon systems and munitions; C4ISR and IT solutions; and shipbuilding. The company, led by

Phebe N Novakovic, S Daniel Johnson and Mark C Roualet in 2017 recorded $31 Billion Revenues.

CSRA (NYSE: CSRA) is a leading government IT business providing next-generation technology solutions to federal customers. CSRA’s solutions are organized into six service areas: cyber; data and analytics; digital platforms; digital services; enterprise business services; and intelligent business process services. The company’s FY2017 (March) revenue was $5 billion. The company, led by Lawrence B Prior III, George Batsakis and David F Keffer, is based in Falls Church.

Jenner & Block advised General Dynamics with a team including Corporate Partners Joseph P. Gromacki (Picture), Edward L. Prokop and Michael T. Wolf led the firm’s multidisciplinary team that included tax counsel from Geoffrey M. Davis, intellectual property counsel from Steven R. Englund, litigation advice from Brian J. Fischer and Richard F. Ziegler, labor and employment counsel from Sarah E. Haddy, Matthew J. Renaud, Michael T. Graham and Will E. Wilder, financing counsel from Brian S. Hart and Anna Meresidis, government contracts counsel from Matthew L. Haws, Gregory H. Petkoff, D. Joe Smith and Marc A. Van Allen, securities counsel from David M. Lynn, real estate counsel from Michelle M. McAtee, and environmental counsel from Steven M. Siros.

Paul, Weiss represented CSRA with a team including partners Scott Barshay, Jeffrey Marell and Jeh Johnson; corporate partners Thomas de la Bastide, John Kennedy, David Klein and Manuel Frey and counsel Stephen Koo, Kyle Seifried, Patricia Vaz de Almeida, Brian Scrivani, Paul Donnelly and Frances Mi; employee benefits partner Larry Witdorchic and counsel Jarrett Hoffman; tax partner Jeffrey Samuels and counsel Alyssa Wolpin; litigation partners Geoffrey Chepiga, Lewis Clayton and Daniel Toal; intellectual property partner Chuck Googe; and antitrust counsel Marta Kelly.

Debevoise & Plimpton LLP is advising Evercore with Michael A. Diz (Picture), Jeffrey J. Rosen, Usman Arain and John R. Love.

 

Involved fees earner: Joseph Gromack – Jenner & Block; Edward L. Prokop – Jenner & Block; Michael Wolf – Jenner & Block; Geoffrey Davis – Jenner & Block; Steven Englund – Jenner & Block; Brian Fischer – Jenner & Block; Richard Ziegler – Jenner & Block; Sarah Haddy – Jenner & Block; Matthew Renaud – Jenner & Block; Michael Graham – Jenner & Block; Will Wilder – Jenner & Block; Brian Hart – Jenner & Block; Anna Meresidis – Jenner & Block; Matthew Haws – Jenner & Block; Gregory Petkoff – Jenner & Block; D. Joe Smith – Jenner & Block; Marc Van Allen – Jenner & Block; David Lynn – Jenner & Block; Michelle McAtee – Jenner & Block; Steven Siros – Jenner & Block; Scott Barshay – Paul Weiss Rifkind Wharton & Garrison; Jeffrey Marell – Paul Weiss Rifkind Wharton & Garrison; David M. Klein – Paul Weiss Rifkind Wharton & Garrison; Kyle Seifried – Paul Weiss Rifkind Wharton & Garrison; Brian Scrivani – Paul Weiss Rifkind Wharton & Garrison; Paul Donnelly – Paul Weiss Rifkind Wharton & Garrison; Frances Mi – Paul Weiss Rifkind Wharton & Garrison; Thomas de la Bastide – Paul Weiss Rifkind Wharton & Garrison; Stephen Koo – Paul Weiss Rifkind Wharton & Garrison; Lawrence Witdorchic – Paul Weiss Rifkind Wharton & Garrison; Jarrett Hoffman – Paul Weiss Rifkind Wharton & Garrison; Jeffrey Samuels – Paul Weiss Rifkind Wharton & Garrison; Alyssa Wolpin – Paul Weiss Rifkind Wharton & Garrison; Jeh Charles Johnson – Paul Weiss Rifkind Wharton & Garrison; Geoffrey Chepiga – Paul Weiss Rifkind Wharton & Garrison; Lewis Clayton – Paul Weiss Rifkind Wharton & Garrison; Daniel Toal – Paul Weiss Rifkind Wharton & Garrison; Charles Googe – Paul Weiss Rifkind Wharton & Garrison; Marta Kelly – Paul Weiss Rifkind Wharton & Garrison; John Kennedy – Paul Weiss Rifkind Wharton & Garrison; Patricia Vaz de Almeida – Paul Weiss Rifkind Wharton & Garrison; Manuel Frey – Paul Weiss Rifkind Wharton & Garrison; Michael Diz – Debevoise & Plimpton; Jeffrey Rosen – Debevoise & Plimpton; Usman Arain – Debevoise & Plimpton; John Love – Debevoise & Plimpton;

Law Firms: Jenner & Block; Paul Weiss Rifkind Wharton & Garrison; Debevoise & Plimpton;

Clients: Evercore Partners; CSRA Inc.; General Dynamics;

 

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Author: Ambrogio Visconti