A surge in the urge to merge
Many of Virginia’s top companies have been involved in recent deals
Virginia’s largest companies have been in a merging mood in recent years.
In mid-February, General Dynamics, Virginia’s second-largest publicly traded company announced plans to acquire CSRA, a government IT services company, in a cash deal worth $9.6 billion including the assumption of debt.
Both companies are based in Falls Church. If all goes as planned, the deal will be completed by the middle of the year.
CSRA itself is the result of another deal in 2015. Falls Church-based Computer Sciences Corp. (CSC) combined its North American public-sector business with SRA International to create CSRA.
CSC wasn’t done. Last year, it merged with the Enterprise Services division of Hewlett Packard Enterprise to create DXC Technology, a Tysons-based information technology and consulting services company with $26 billion in revenue.
Other big public companies have been involved either in mergers or the spin-off of subsidiaries. Reston-based Leidos Holdings combined with Lockheed Martin’s information systems business in 2016, a deal that made Leidos the biggest IT provider to the federal government.
Leidos was created in 2013 when Science Applications International Corp. (SAIC) split into two separate, publicly traded companies. The spun-off company kept the SAIC name.
A similar name-swapping split occurred in 2015 when the Gannett Co. separated its publishing and broadcasting divisions. The spun-off publishing business kept the Gannett name while the broadcast business became Tegna Inc. It owns or operates 46 television stations in 38 U.S. markets. Like CSC and Leidos, Tegna wasn’t through. It spun off its automotive marketing site, Cars.com, as a separate company in May.
One of the most dramatic mergers involving a Virginia company occurred in 2015 when Chesapeake-based Dollar Tree Inc. won a bidding battle with rival Dollar General to acquire Family Dollar for $9.1 billion. Dollar Tree now operates more than 14,000 stores and has annual revenue of more than $20 billion.
Some deals, however, seem to be plagued with delays. Henrico County-based Genworth Financial announced in October 2016 that China Oceanwide Holdings would acquire it for $2.7 billion. Originally expected to be completed last year, the deal has been delayed repeatedly.
The problem has been the companies’ inability so far to win approval from the Committee on Foreign Investment in the United States (CFIUS), which screens foreign takeovers of American companies for national security issues. Genworth and Oceanwide refiled their CFIUS application for a third time in February.
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