UPDATE 1-General Dynamics to buy govt IT contractor CSRA for $6.8 bln

(Adds details on the deal, shares)

Feb 12 (Reuters) - General Dynamics Corp said on Monday it would buy U.S. defense IT contractor CSRA Inc for about $6.8 billion to boost its information technology unit, which serves the U.S. Department of Defense, intelligence community and federal civilian agencies.

General Dynamics's $40.75-per-share cash offer represents a premium of 32 percent to CSRA stock's closing price on Friday.

CSRA's shares jumped 31.4 percent to $40.50 in premarket trading on Monday.

General Dynamics, the maker of Gulfstream jets, tanks and U.S. Navy ships, said the transaction is valued at $9.6 billion, including the assumption of $2.8 billion in CSRA debt.

CSRA generated about 94 percent of its revenue in the fiscal years ended March 2017 from sales to the U.S. government either as a prime contractor or subcontractor, according to the company's last annual regulatory filing in May.

General Dynamics' information systems and technology business is its biggest unit and provides combat software solutions and combat-ready computing equipment.

The company said it expects the deal to add to its earnings per share and free cash flow per share in 2019 and generate annual pre-tax cost savings of about 2 percent of the combined company's revenue by 2020.

General Dynamics expects to fund the deal through a combination of available cash and new debt financing.

Stone Key Group LLC is General Dynamics' exclusive financial adviser, while Evercore and Macquarie Capital advised CSRA. (Reporting by Arunima Banerjee in Bengaluru; Editing by Savio D'Souza)