CSRA Signs Agreement To Buy Praxis Engineering For $235M

Csra Inc. (NYSE:CSRA) recently announced that it has signed a definitive agreement to acquire Praxis Engineering Technologies Inc, a developer of intelligent mission applications, for $235 million in cash.

Praxis Engineering looks after the practical applications of engineering technologies for mission critical solutions and has an employee base of almost 350 people. The acquisition is anticipated to prove beneficial for intelligence community customers.

This combination will accelerate the adoption of new age technologies as customers upgrade their applications. CSRA’s top line is also expected to benefit from the addition of Praxis’ solutions to its portfolio, which will also increase the customer base of the company.

Notably, CSRA announced this takeover around three months after the completion of its acquisition of NES in July 2017, the first since it went public.

The addition of NES is anticipated to improve CSRA’s expertise in defense telecom, infrastructure and applications architecture as well as implementation services.

Frequent Contract Wins: A Boon

CSRA’s solid domain knowledge and expertise in next-generation IT services are helping it win new contracts on a regular basis.

Most recently, the company won a $24.5 million worth Scientific and Technical Support (STS) contract from the U.S. Environmental Protection Agency (EPA). Notably, CSRA had won all the prior versions of the contract in which the company will be assisting the EPA Office of Water (OW) Engineering and Analysis Division.

Prior to that, CSRA won a $34.6 million cloud-based contract from the US Navy. Per this blanket purchase agreement, CSRA will serve the Navy’s Science and Technology (S&T) community with cloud migration services to Amazon’s (NASDAQ:AMZN) AWS and Microsoft’s (NASDAQ:MSFT) Azure.

In early September, the company won a massive $2.4 billion Greenway contract via its 79% shareholding joint venture — Eagle Alliance. Also, in August, it secured a $115 million contract from the EPA Office of Environmental Information (OEI).

We believe that the company’s own solutions enhanced by the tuck-in acquisitions discussed above will help it to win new contracts going forward, thereby improving its top line. Moreover, improving federal spending and partnerships with the likes of ServiceNow (NYSE:NOW) , Microsoft and Red Hat are major tailwinds for CSRA.

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