CACI International (CACI) Withdraws Offer To Acquire CSRA

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 industry in the last three months with an average return of 12.5% compared with 1% growth recorded by the latter.



The company intends to drive operational excellence by intensively focusing on its organic and inorganic growth strategy and strengthening its existing customer relationships while building newer ones. CACI’s robust business model is expected to help it grow and achieve newer heights.

Zacks Rank and Stocks to Consider

CACI carries a Zacks Rank #3 (Hold). A better-ranked stock in the industry is ManTech International Corporation (NASDAQ:MANT) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ManTech has an expected long-term earnings growth rate of 8%. It surpassed earnings estimates in each of the trailing four quarters with an average beat of 9.4%.

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CSRA Inc. (CSRA): Free Stock Analysis Report

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CACI International, Inc. (CACI): Free Stock Analysis Report

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