- CSRA completes merger with SRA
International, along with planned refinancing and payment of
previously announced special dividend
- Boards declare quarterly dividend of
$0.14 per CSC share and $0.10 per CSRA share, aggregating to a 4
percent increase over previous CSC quarterly dividend
- CSRA Board authorizes share repurchase
plan of up to $400 million over three years
CSRA Inc. (NYSE:CSRA) today announced that it has completed its
separation from CSC (NYSE: CSC) and is now an independent public
company trading on the New York Stock Exchange (“NYSE”) under the
ticker symbol “CSRA.” Additionally, CSRA completed its planned
combination with SRA International, Inc. (SRA). This morning,
members of the CSC and CSRA leadership teams will ring the NYSE
Opening Bell® to mark the milestone.
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CSRA, with 19,000 employees and pro-forma revenues of $5.5
billion, helps U.S. government customers modernize their
legacy systems, protect their networks and assets, and improve the
effectiveness and efficiency of mission-critical functions. CSC is
a leading global IT services company with 56,000 employees in more
than 60 countries. CSC leads clients on their digital
transformation journeys by providing innovative, next-generation
technology solutions that leverage alliance partners, proprietary
intellectual property (IP) and extensive domain expertise.
“A little more than six months ago, CSC’s Board of Directors
determined that two leading pure-play companies, focused
exclusively on their respective customer segments, would best serve
the interests of our clients, employees and other stakeholders,”
said Mike Lawrie, CSC president and CEO and CSRA chairman. “The
debut of CSRA and the completion of the merger with SRA accelerate
our transformational goals and enable both CSC and CSRA to drive
innovation and better address the demands of the markets they
serve. On behalf of both Boards and leadership, I want to thank
everyone who helped make today a reality.”
“By combining the former CSC and SRA businesses into CSRA, we
have created the leading provider of next generation IT solutions
that will really make a difference in how our government serves our
country and our citizens,” said Larry Prior, chief executive
officer, CSRA. “I am proud of the heritage, culture, and people of
both of these great organizations and excited about moving forward
together as a single, stronger company dedicated to supporting the
important missions of our customers.”
Completion of Separation
Under the terms of the separation agreements, on November 27,
2015, stockholders who held CSC common stock at the close of
business on November 18, 2015 (the “Record Date”), received a
distribution of one CSRA common share for every one share of CSC
common stock held as of the Record Date.
Since November 16, 2015, CSRA shares have traded on a “when
issued” basis on the NYSE under the symbol “CSRA WI,” permitting
investors to trade the right to receive CSRA shares in the
distribution. “When issued” trading of CSRA common shares ended at
the close of the market on November 27, 2015. Starting today, the
“regular way” trading of CSRA common stock on the NYSE will
commence under the symbol “CSRA.”
Payment of Special Dividend
Today CSC and CSRA each paid concurrent special cash dividends
which in the aggregate totaled $10.50 per share. Of that $10.50 per
share dividend, $2.25 was paid by CSC and $8.25 was paid by CSRA.
Payment of each portion of the special dividend was made to holders
of CSC common stock on the Record Date who received shares of CSRA
common stock in the distribution.
Completion of Merger
This morning, SRA merged with and into a wholly-owned subsidiary
of CSRA. In connection with the merger, former SRA shareholders
received $390 million in cash and approximately 25 million CSRA
shares, constituting approximately 15 percent of the outstanding
CSRA common shares. Prior to the merger, SRA was owned by a
shareholder group led by Providence Equity Partners and SRA’s
founder, Dr. Ernst Volgenau, as well as members of its management
team.
Entry into Financing Arrangements
Concurrently with the consummation of the spin-off and the
mergers, CSRA entered into definitive agreements providing for
approximately $3.5 billion in principal amount of secured
indebtedness, of which $1.56 billion was drawn after the spin-off
to fund the special dividends, transaction costs and repayment of
indebtedness and $1.44 billion was drawn upon consummation of the
merger to pay merger consideration and transaction costs and to
refinance existing SRA indebtedness.
Approximately $500 million of available credit remains
undrawn.
Appointment of CSRA Directors and Officers
Effective November 27, 2015, Mike Lawrie, Keith B. Alexander,
Sanju Bansul, Michèle A. Flournoy, Mark Frantz, Nancy Killefer,
Sean O’Keefe, Larry Prior and Michael E. Ventling were appointed to
CSRA’s Board of Directors, joining Billie Williamson who was
appointed earlier as a member of CSRA’s Board and Audit
Committee.
Additionally, upon completion of the merger with SRA, the CSRA
Board appointed David F. Keffer as chief financial officer and John
Reing as chief human resources officer.
Quarterly Cash Dividends and CSRA Share Repurchase
Program
CSC’s Board of Directors has declared a regular quarterly cash
dividend of $0.14 per share on CSC common stock. The dividend will
be paid on January 26, 2016 to CSC stockholders of record at the
close of business on January 5, 2016.
CSRA’s Board of Directors has declared a regular quarterly cash
dividend of $0.10 per share on CSRA’s common stock. The first
quarterly dividend will be paid on January 26, 2016 to CSRA
stockholders of record at the close of business on January 5,
2016.
Stockholders who continue to hold both CSC and CSRA shares will
receive an increase in quarterly cash dividend of approximately 4
percent from the previous quarterly cash dividends paid by CSC.
CSRA’s Board of Directors authorized up to $400 million for
future repurchases of outstanding shares of its common stock, from
today’s date through March 31, 2019.
Other Information
The transfer agent and registrar for the CSRA common stock will
be ComputerShare Trust Company, N.A. For questions relating to the
transfer of shares, stockholders may contact ComputerShare via
phone at +1-800-522-6645 or +1-201-680-6578 (for international
callers). If shares are held by a bank, broker or other nominee,
stockholders should contact that institution directly.
RBC Capital Markets, Guggenheim Securities, and Goldman, Sachs
& Co. acted as financial advisors to CSC with regard to the
spin-off of CSRA Inc. Guggenheim Securities acted as financial
advisor to CSC and CSRA with respect to the merger with SRA, and
RBC Capital Markets also provided advice with respect to the SRA
merger. Allen & Overy LLP acted as legal advisor to CSC with
respect to the spin-off of CSRA and as legal advisor to CSC and
CSRA with respect to the merger with SRA. Skadden, Arps, Slate,
Meagher, and Flom LLP provided legal advice to CSC with respect to
tax-related matters in the spin-off of CSRA from CSC.
Related Press Releases
- Nov. 4, 2015: CSC Board Approves
Proceeding with Spin-Off of U.S. Public Sector Business Under CSRA
Inc. Name
- Aug. 31, 2015: CSC to Combine
Government Services Unit with SRA Upon Separation from CSC;
Combination will Create Leading Pure-Play Government I.T. Business
in the U.S.
- May 19, 2015: CSC Announces Plan to
Separate into Two Independent, Publicly Traded Companies
About CSC
CSC (NYSE: CSC) leads clients on their digital
transformation journeys. The company provides innovative
next-generation technology services and solutions that leverage
deep industry expertise, global scale, technology independence and
an extensive partner community. CSC serves leading commercial and
international public sector organizations throughout the world. CSC
is a Fortune 500 company and ranked among the best corporate
citizens. For more information, visit us at www.csc.com.
About CSRA
Every day CSRA (NYSE: CSRA) makes a difference in how the
government serves our country and our citizens. We deliver a broad
range of innovative, next-generation IT solutions and professional
services to help our customers modernize their legacy systems,
protect their networks and assets, and improve the effectiveness
and efficiency of mission-critical functions for our warfighters
and our citizens. Our 19,000 employees understand that success is a
matter of perseverance, courage, adaptability and experience. CSRA
is headquartered in Falls Church, Virginia and has revenues of
approximately $5.5 billion. To learn more about CSRA, visit
www.csra.com.
Forward-looking Statements
All statements in this press release and in all future press
releases that do not directly and exclusively relate to historical
facts constitute “forward-looking statements” within the meaning of
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements represent CSRA’s intentions,
plans, expectations and beliefs, and are subject to risks,
uncertainties and other factors, many of which are outside the
control of CSRA. These factors could cause actual results to differ
materially from such forward-looking statements. For a written
description of these factors, see the section titled “Risk Factors”
in CSRA’s registration statement on Form 10 and any updating
information in subsequent SEC filings. CSRA disclaims any intention
or obligation to update these forward-looking statements whether as
a result of subsequent event or otherwise, except as required by
law.
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CSCGlobal CommunicationsRichard Adamonis,
862-228-3481radamonis@csc.comorInvestor RelationsNeil DeSilva,
703-641-3000,neildesilva@csc.comorCSRACommunicationsLauren
Peduzzi, 571-446-5462lauren.peduzzi@csra.comorInvestor
RelationsStuart Davis, 703-641-2267stuart.davis@csra.com
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