General Dynamics, a shipbuilder for the U.S. military, is making itself one of the government’s largest information-technology contractors with the $9.6 billion purchase of cybersecurity specialist CSRA.

The deal positions the combined company to take advantage of higher military spending under President Trump, who signed a government funding bill last week that calls for defense funding to rise to $700 billion this year and $716 billion in 2019. A real estate mogul from New York, the chief executive has promised to increase support for the U.S. armed forces.

“Recent events such as the newly-approved increase in budget, the realization that awarding to the lowest bidder has not worked and quality matters, all aligned at this point to make the combination of General Dynamics and CSRA a market-changing event,” said Dan Johnson, who heads the purchaser’s information technology and services business.

General Dynamics agreed to pay $6.8 billion for the company, a 27 percent premium to its four-week average share price, and take over its $2.8 billion debt. Afterward, CSRA — which specializes in fields from cybersecurity to building digital platforms — will be rolled into General Dynamics Information Technology, or GDIT.

“What we’re doing with this transaction is taking our good GDIT business and making it a better, stronger, more viable competitor over time,” General Dynamics CEO Phebe N. Novakovic said during a conference call. “We believe in that information-technology service space. We’re good at it. We know how to do it. We’re adding to our core.”

The transaction creates the U.S. government’s second-biggest information-technology contractor, outranked only by Leidos, the renamed Science Applications International Corp. After adding CSRA’s $5 billion in revenue, the combined General Dynamics information-tech business will have roughly $9.5 billion in annual sales.

Prior to the purchase, General Dynamics' information systems business accounted for nearly a third of its $30.9 billion in annual revenue. It was the fastest-growing unit by revenue, with a gain of about 9.5 percent in the last three months of 2017, according to Robert Spingarn, an analyst with Credit Suisse.

The deal values CSRA at roughly 1.8 times estimated 2018 revenue, compared with a median multiple of 1.3 for similar transactions, according to data compiled by Bloomberg.

General Dynamics fell 1.2 percent to $209.53 at the close of regular trading in New York on Monday. Its shares have climbed about 3 percent this year, compared with a slight decline on the S&P 500. CSRA gained 31 percent to $40.39.