The spinoff and merger that created CSRA in the recent past was not enough growth for the company, so the government contractor called on Holland & Knight's experienced Mergers and Acquisitions (M&A) Team to help with an aggressive corporate development plan. In 2017, the company acquired NES Associates for $105 million and then Praxis Engineering for $235 million. In both transactions, our M&A Team led comprehensive due diligence on the targets, performed complex tax analysis and incorporated industry-focused risk balancing into the terms of transaction documents.
With more than 30 M&A engagements and nearly $1 billion in transactions while at its predecessor firm, CSC, members of CSRA's corporate development team were already highly familiar with Holland & Knight's strengths in risk mitigation, tax analysis and transaction execution, and had worked extensively with teams across the firm in government contracts, real estate, litigation, intellectual property and antitrust matters. The Holland & Knight teams worked again with CSRA to understand its business analysis and goals with each acquisition, and to collaborate closely with the CSRA team to close two strategic acquisitions.
Regarding the NES transaction, CSRA CEO Larry Prior said, "I'm pleased we have closed on our first acquisition as a public company. NES Associates will bring us innovative network engineering capabilities as we pursue large IT modernization opportunities in upcoming years. It is another example of how we live our tagline, 'Think Next. Now.' "
The Praxis transaction followed shortly after the NES closing and was particularly important to the development of CSRA, which worked closely with Holland & Knight's M&A, Taxation and Corporate Services teams in analyzing and preparing its bid. The teams collaborated on a strategy to achieve the client's tax objectives by asking that Praxis Engineering convert from a corporation to a limited liability company prior to the sale. The firm's Insurance Industry Team helped negotiate rep and warranty insurance coverage for CSRA, which the company included as a key element of its final bid. Moreover, there were multiple bidders for the target. CSRA was advised that it was chosen as the successful bidder in part because of the strategic use of rep and warranty insurance and in part because other key transaction terms provided by the M&A Team, led by Holland & Knight Partners Michael Mannix and Marisa Terrenzi, reflected deep industry knowledge and savvy market-based risk balancing.
Following the Praxis transaction, Mr. Prior said, "I'm ecstatic that we will be able to enhance the CSRA value proposition to the Intelligence Community with the acquisition of Praxis. With customers increasingly ready to adopt next-generation technologies, CSRA will be better able to help customers leverage more efficient infrastructures as they rationalize and modernize their mission applications."
Following the successful acquisitions in 2017, CSRA General Counsel William J. Haynes turned to Holland & Knight to help provide strategic planning and risk mitigation to support the sale of CSRA to the eventual successful bidder, General Dynamics Information Technology (GDIT). The deal was valued at $9.6 billion, including $2.8 billion in debt. The M&A Team structured provisions of the transaction agreements, provided key evaluations of the treatment of certain litigation risks in the sale, and used its understanding of the industry to negotiate the government contracts provisions of the transaction documents.
"The Holland & Knight team led by Michael Mannix, John Brownlee and Marisa Terrenzi in Tysons provided the very best support for our recent M&A transactions, litigation and other work. They helped us structure and close two important acquisitions in 2017, and the firm's support on our own acquisition helped us implement key strategies in structuring for the sale," Haynes said.
"I have worked with Mike Mannix and Marisa Terrenzi of Holland & Knight's M&A Team for more than seven years. Over the course of some 30 M&A engagements, CSRA and its predecessor CSC came to rely upon Holland & Knight for sound business judgment and legal advice. They are skilled in the mechanics of executing a transaction, but more importantly, they provided invaluable assistance in recommending structures, balancing the risk in M&A documents, and securing antitrust and other consents," said Adam Sheipe, vice president and head of corporate development for CSRA. "We have come to see the Holland & Knight lawyers as an integral part of our CSRA team."
Helping clients complete multifaceted M&A transactions requires more than just legal knowledge. It requires a solid understanding of the industries and entities involved, as well as the ability to assemble the right team of lawyers. Holland & Knight offers the in-depth industry knowledge and breadth of legal experience required to handle the most complex transactions in a skillful and seamless manner. Representing numerous clients in the government contracts, technology, telecommunications, healthcare, energy, financial services, maritime, professional services and other sectors, our industry immersion further enhances the support you gain when partnering with our team.
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