Falls Church, Va.-basedÂ Computer Sciences Corp. (NYSE: CSC) has agreed toÂ merge its U.S.Â government services unit with SRA International as part of its plans to spin off the unit.
The companiesÂ said Monday they expect to close the merger in November upon completion of the Computer Sciences Government Service’s separation from and shareholders inÂ CSCGov will own 84.68 percent of the combined company.
SRA shareholdersÂ will hold the remainingÂ 15.32 percent and receive a $390 million cash payment.
News of the deal surfaces nearly two months after SRA filed a registration statement with the Securities and Exchange Commission to become a publicly-traded company and close to four month afterÂ CSC unveiled its plan to spin off its U.S. government services unit into a separate company.
Providence Equity PartnersÂ bought SRA for nearly $2 billion in 2011 and SRA founder Dr. Ernst Volgenau is also a leader of theÂ Fairfax, Va.-based contractor’s shareholder group.
SRA’s shareholders have approved the deal and a CSCÂ shareholder vote is not required.
âThe combination of CSGov and SRA is an important strategic move to best position the combined company as the government IT services industry consolidates, â Mike Lawrie, CSC president and CEO.
Lawrie will serve asÂ chairman of the board at the combined company and Larry Prior, executive vice president and general manager of the North American public sector unit at CSC, will serve as CEO.
CSC and SRA estimated theÂ combined firm to haveÂ least 19, 000 employees and approximately $5.5 billion in fiscal year 2015 revenue.
CSC said theÂ combined company will pursue growth in markets such as software development, cybersecurity, cloud, information technology, bioinformatics and intelligence analysis.