Computer Sciences Corporation (NYSE:CSC) suffered a huge decline after the company announced the completion of the separation of CSRA Inc., its North American public-sector business, as an independent, publicly-traded company.
The stock price of Computers Sciences Corporation closed $31.31 per share, down by more than 54% on Monday.
Details of the separation
Under the terms of the separation agreements, the stockholders of Computers Sciences Corporation will receive one CSRA common stock for every CSC common stock they own at the close of business on November 18.
The CSRA common stock started trading on a “when issued” basis on the New York Stock Exchange (NYSW) under the symbol “CSRA WI,” which allows investors to trade the right to receive CSRA shares in the distribution.
The trading of CSRA WI common shares ended at the close of the market on Nov. 27. The regular trading of CSRA common stock started today on the NYSE.
In a statement, Mike Lawrie, president and CEO of Computer Sciences Corporation and Chairman of CSRA said, “A little more than six months ago, CSC’s Board of Directors determined that two leading pure-play companies, focused exclusively on their respective customer segments, would best serve the interests of our clients, employees and other stakeholders.”
CSRA completes merger with SRA International
Computer Sciences Corporation also announced that CSRA merged with SRA International, which was owned by its founder Dr. Ernst Volgenau and an investor group led by Providence Equity Partners.
The previous shareholders of SRA International received $390 million in cash and approximately 25 million CSRA shares, which accounts 15% of the outstanding CSRA common shares.
According to Lawrie, CSRA’s merger with SRA International and its debut on the NYSE enable the management to speed up their transformational goals and allow both Computer Sciences Corporation and CSRA to drive innovation.
CSRA CEO Larry prior commented, “By combining the former CSC and SRA businesses into CSRA, we have created the leading provider of next generation IT solutions that will really make a difference in how our government serves our country and our citizens.”
CSC, CSRA dividend
Computer Sciences Corporation and CSRA paid a total of $10.50 per share in special cash dividend ($2.25 paid by CSC and $8.25 by CSRA) to the shareholders of CSC common stock who received CSRA common stock.
The board of directors of Computer Sciences Corporation and CSRA also declared a regular quarterly dividend of $0.14 per share and $0.10 per share, respectively. The dividend will be paid on January 26 to shareholders of record at the close of business on January 5, 2016.