CACI International (CACI) Withdraws Offer To Acquire CSRA
Zacks Investment Research | Mar 28, 2018 10:59PM ET
The U.S. defense contractor, CACI International Inc (NYSE:CACI) has decided to withdraw its previously announced offer to acquire all outstanding shares of CSRA Inc. (NYSE:CSRA) for $44 per share in cash and stock. The company has lost a month-long bidding war to General Dynamics Corporation (NYSE:GD) , an American defense multinational corporation.
The move comes a week after General Dynamics raised its all-cash offer for CSRA to $6.9 billion from $6.8 billion, making it difficult for CACI to match up. CACI has delivered a letter, withdrawing its offer, to CSRA’s Board Chair and Chief Executive Officer. Moreover, General Dynamics' offer is in cash, which is considered to be less risky than CACI's cash and stock bid.
CACI stock fell 7.5% a day after it offered to buy CSRA for 0.184 shares of its common stock for each share of CSRA and cash equal to $15 per share. Although management believed that both the companies offered a unique combination with significant potential for cost synergies, it decided not to pursue the acquisition any further. Instead the company would continue to look for suitable acquisition targets to augment its long-term growth.
The company has a large pipeline of new projects and continues to win more deals at regular intervals. These back-to-back contract wins are the key catalysts driving success perennially for the company. Furthermore, having the government as a big client lends stability to the business and moderates fluctuations in revenue.
CACI has been doing very well with a record level of awards, which reflects its disciplined business development actions, consistent operational excellence and high customer satisfaction. Going forward, the company continues to execute its strategy of winning high-value contracts, delivering excellence to its customers and deploying its capital for growth.
CACI remains focused on the federal government marketplace and capturing more market share. The stock has significantly outperformed the Original post
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