CSC [CSC] said on Nov. 4 that its board approved the spin-off of its federal systems business in November, adding that the new business will be called CSRA Inc.
CSC will complete the divestiture of CSRA on Nov. 18. CSRA, which will trade on the New York Stock Exchange under the stock ticker symbol “CSRA,” is expected to close its pending acquisition of SRA International on Nov. 30.
SRA, a provider of IT and professional services, is owned by a shareholder groups consisting of the private equity firm Providence Equity Partners, SRA founder Ernst Volgenau, and the company’s management.
The combination of CSC’s government services business with SRA will create a roughly $5.5 billion business with nearly 19,000 employees, making it the largest pure-play IT services provider to the federal government, CSC said in August when it announced the deal.
Under terms of the spin-off arrangement, CSC shareholders will receive one share of CSRA common stock for each share of CSC stock they won. After CSRA share are distributed, CSC and CSRA will each pay special cash dividends worth a total of $10.50 per share to holders of CSC common stock. CSC will pay $2.25 of the dividend and CSRA $8.25.
CSRA will be led by Lawrence Prior, as CEO. Prior is currently executive vice president and general manager CSC’s North American Public Sector unit. Mike Lawrie, CSC’s president and CEO, will be chairman of CSRA.
At the close of the merger with SRA, CSRA’s shareholders will own 85 percent of the company and SRA’s shareholders 15 percent.