# General Dynamics to buy CSRA for almost $7 billion **URL:** \ **Category:** Factual Questions\ **Created:** [February 12, 2018, 3:02pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687 "2018-02-12T15:02:25Z")\ **Posts on this page:** 17\ **Page:** 1
**Author:** ![Mr\_Quatro](https://avatars.discourse-cdn.com/v4/letter/m/bc8723/32.png) [@Mr\_Quatro](https://boards.straightdope.com/u/Mr_Quatro)\ **Post date:** [February 12, 2018, 3:02pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/1 "2018-02-12T15:02:25Z")
What does this mean? Why would General Dynamics pay (7) billion dollars for this company? At 73 I am getting old, uh? But I don’t understand the positive value here … You can comprehend this better than I can, right? [http://abcnews.go.com/Business/wireStory/general-dynamics-buying-csra-68-billion-53014732](http://abcnews.go.com/Business/wireStory/general-dynamics-buying-csra-68-billion-53014732) > [@](#): > > Chairman and CEO Phebe Novakovic said in a printed statement that the acquisition will help General Dynamics provide cost-effective internet technology solutions to the Department of Defense, intelligence community and federal civilian agencies. Both companies are based in Falls Church, Virginia. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [February 12, 2018, 3:39pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/2 "2018-02-12T15:39:01Z")
What exactly is your question? ---
**Author:** ![Telemark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/telemark/32/372_2.png) [@Telemark](https://boards.straightdope.com/u/Telemark)\ **Post date:** [February 12, 2018, 3:47pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/3 "2018-02-12T15:47:23Z")
Yeah, I’m a little confused about what you’re asking. CSRA is a technology company that can help General Dynamics produce a more efficient, cheaper, and more secure digital infrastructure, particularly in relation the complex morass that is government procurement. That’s worth money. ---
**Author:** ![Crotalus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/crotalus/32/41_2.png) [@Crotalus](https://boards.straightdope.com/u/Crotalus)\ **Post date:** [February 12, 2018, 3:50pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/4 "2018-02-12T15:50:00Z")
General Dynamics has lots of experience selling things to the government and wants to sell more things to the government. CSRA has lots of experience making internet-related things that General Dynamics doesn’t currently know how to make, and which CSRA is not currently selling to the government. Buying CSRA will enable General Dynamics to increase its sales to the government by an amount that justifies the purchase price. That’s my take on it. Seems a pretty simple growth by acquisition play. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [February 12, 2018, 3:53pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/5 "2018-02-12T15:53:57Z")
> [@Crotalus](#): > > CSRA has lots of experience making internet-related things that General Dynamics doesn’t currently know how to make, and which CSRA is not currently selling to the government. Actually CSRA is already primarily a government/defense contractor. ---
**Author:** ![Mr\_Quatro](https://avatars.discourse-cdn.com/v4/letter/m/bc8723/32.png) [@Mr\_Quatro](https://boards.straightdope.com/u/Mr_Quatro)\ **Post date:** [February 12, 2018, 3:58pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/6 "2018-02-12T15:58:16Z")
This is an internet thing? For safe secure internet? How much is google or yahoo worth? Why (7) billion dollars? ---
**Author:** ![Crotalus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/crotalus/32/41_2.png) [@Crotalus](https://boards.straightdope.com/u/Crotalus)\ **Post date:** [February 12, 2018, 4:00pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/7 "2018-02-12T16:00:10Z")
> [@friedo](#): > > Actually CSRA is already primarily a government/defense contractor. Thanks. I guessed otherwise based on the sparse linked story, but your fact makes the reasoning behind the purchase even simpler. ---
**Author:** ![Mr\_Quatro](https://avatars.discourse-cdn.com/v4/letter/m/bc8723/32.png) [@Mr\_Quatro](https://boards.straightdope.com/u/Mr_Quatro)\ **Post date:** [February 12, 2018, 4:07pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/8 "2018-02-12T16:07:04Z")
Public information: [CSRA Inc. - Wikipedia](https://en.wikipedia.org/wiki/CSRA_(IT_services_company)) > [@](#): > > CSRA Inc. provides information technology services to U.S. government clients in national security, civil government, and health care and public health. Its largest market, national security, includes the Department of Defense, Homeland Security, U.S. Army, U.S. Air Force, and intelligence agencies. Does this have anything to do with super computers mining for information? ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [February 12, 2018, 4:08pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/9 "2018-02-12T16:08:09Z")
> [@Mr\_Quatro](#): > > This is an internet thing? For safe secure internet? How much is google or yahoo worth? What? _What is your question?_ What are you not understanding about this that you are trying to understand? Google’s (well, Alphabet Inc’s) market capitalization $733 billion. Yahoo’s was sold (mostly) to Verizon for $4.8 billion in 2016. > [@](#): > > Why (7) billion dollars? Because that’s what they were willing to pay for it. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [February 12, 2018, 4:10pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/10 "2018-02-12T16:10:51Z")
> [@Mr\_Quatro](#): > > Does this have anything to do with super computers mining for information? Data analysis tools are a big part of what they do. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [February 12, 2018, 4:13pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/11 "2018-02-12T16:13:47Z")
> [@Mr\_Quatro](#): > > Why (7) billion dollars? From CNBC, “General Dynamics’s $40.75-per-share cash offer represents a premium of 32 percent to CSRA stock’s closing price on Friday.” So about a third more than the stock was already selling for. Based on the mergers I’ve seen reported, that doesn’t seem unreasonable. ---
**Author:** ![Mr\_Quatro](https://avatars.discourse-cdn.com/v4/letter/m/bc8723/32.png) [@Mr\_Quatro](https://boards.straightdope.com/u/Mr_Quatro)\ **Post date:** [February 12, 2018, 4:19pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/12 "2018-02-12T16:19:12Z")
> [@](#): > > Everywhere you look, CSRA is there. We’re in our nation’s infrastructure, in training and education, in cybersecurity, in serving veterans who served us—and, so much more. Take some time to learn more about CSRA. You might be surprised to learn how we touch your life. I found this in an explanation of who they are and yes I was surprised how they have touched American lives … more here than a simple look explains ---
**Author:** ![Bijou\_Drains](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bijou_drains/32/2814_2.png) [@Bijou\_Drains](https://boards.straightdope.com/u/Bijou_Drains)\ **Post date:** [February 12, 2018, 4:23pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/13 "2018-02-12T16:23:38Z")
I worked for CSRA , my company was bought by them. Like most military related companies in the DC area, it’s overrun with retired military types. Many of them retire and turn right around and do a very similar job working for a private business. My company did health research , after a few years they decided that did not fit so they sold that group off. ---
**Author:** ![suranyi](https://avatars.discourse-cdn.com/v4/letter/s/e36b37/32.png) [@suranyi](https://boards.straightdope.com/u/suranyi)\ **Post date:** [February 12, 2018, 5:01pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/14 "2018-02-12T17:01:02Z")
> [@Mr\_Quatro](#): > > This is an internet thing? For safe secure internet? How much is google or yahoo worth? > > Why (7) billion dollars? Do you think 7 billion dollars is a lot of money for a company? It isn’t. That’s only the worth of a medium-sized company nowadays. ---
**Author:** ![Mr\_Quatro](https://avatars.discourse-cdn.com/v4/letter/m/bc8723/32.png) [@Mr\_Quatro](https://boards.straightdope.com/u/Mr_Quatro)\ **Post date:** [February 12, 2018, 5:13pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/15 "2018-02-12T17:13:57Z")
> [@suranyi](#): > > Do you think 7 billion dollars is a lot of money for a company? It isn’t. That’s only the worth of a medium-sized company nowadays. I think the (7) billion dollars got my attention and you say it’s not a lot … but then I thought how do they make their profit … They can only charge Uncle Sam to pay the bills … General Dynamic’s I approve of due to the USN subs and ships they build, but I couldn’t understand the CSRA add on … it will make sense someday. Slick advertising for sure: [https://www.csra.com/company](https://www.csra.com/company) > [@](#): > > a company of 19,000+ smart, talented individuals ---
**Author:** ![gnoitall](https://avatars.discourse-cdn.com/v4/letter/g/bb73d2/32.png) [@gnoitall](https://boards.straightdope.com/u/gnoitall)\ **Post date:** [February 12, 2018, 5:31pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/16 "2018-02-12T17:31:50Z")
> [@Mr\_Quatro](#): > > I think the (7) billion dollars got my attention and you say it’s not a lot … but then I thought how do they make their profit … > > They can only charge Uncle Sam to pay the bills … General Dynamic’s I approve of due to the USN subs and ships they build, but I couldn’t understand the CSRA add on … it will make sense someday. Slick advertising for sure: [https://www.csra.com/company](https://www.csra.com/company) This is General Dynamics. Over their history they’ve integrated and spun off many different product areas. Historicaly, they’ve bought out other companies more frequently than my daughter changes outfits. The major common factor is that whatever they buy out, they sell its products primarily to the US DoD. And if you have the products, the DoD has the money. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [February 12, 2018, 6:11pm UTC](https://boards.straightdope.com/t/general-dynamics-to-buy-csra-for-almost-7-billion/808687/17 "2018-02-12T18:11:59Z")
> [@Mr\_Quatro](#): > > I think the (7) billion dollars got my attention and you say it’s not a lot … but then I thought how do they make their profit … > > They can only charge Uncle Sam to pay the bills … General Dynamic’s I approve of due to the USN subs and ships they build, but I couldn’t understand the CSRA add on … it will make sense someday. Slick advertising for sure: [https://www.csra.com/company](https://www.csra.com/company) I feel like we need to start at step one. The military spends about $18 billion a year on ships. It spends about $45 billion a year on IT. There are companies that provide the vast, vast amount of these goods and services to the military. The financial value of these companies is generally determined by the market, which is generally more transparent for a publicly owned company that trades stock on an exchange. In this case, General Dynamics assessed that the intrinsic value of this company - its expertise in IT - would be a valuable addition to GD, which has expertise in other areas. So GD surely looked at the value of CSRA’s stock, made offers to buy an ownership stake at a premium to the current trading price. The boards of the two companies finally reached a number that suited both companies. Again, like the others, I think you need to define your question more precisely and clearly. Just saying, “(7) billion - what’s up with that?” is not helpful.