Earlier this morning CACI International, Inc. announced that it has signed a definitive agreement to acquire Six3 Systems, Inc., a provider of strategic solutions to U.S. Government agencies in the Intelligence, Defense, and Civilian communities, headquartered in McLean, Virginia. Six3 Systems is owned by the Chicago-based private equity firm GTCR.
In a press release, CACI stated that it plans to expand its cyberspace, C4ISR (command, control, communications, computers, intelligence, surveillance, and reconnaissance) and Intelligence service offerings with the acquisition.
Six3 Systems has roughly 1,600 employees worldwide with a revenue, for the 2013 calendar year, of $470 million. CACI purchased the company for $820 million. The transaction is scheduled to close at the end of December 2013, CACI’s fiscal second quarter, subject to regulatory approvals.
The transaction is expected to be at least 5 percent accretive to CACI’s GAAP earnings per share in calendar year (CY) 2014 and at least 10 percent accretive to diluted adjusted earnings per share. CACI has secured a firm financing commitment for $800 million and will finance the acquisition through this new commitment and borrowings under its existing revolving credit facility.
“We look forward to bringing our advanced solutions and capabilities along with our team of highly skilled professionals to CACI. We share in CACI’s dedication to our nation’s most critical missions, and we believe the acquisition will be a win-win situation for both firms: Six3 Systems will benefit from the larger resource and customer space that CACI offers, and CACI will benefit from the leading-edge technical capabilities and innovation that are Six3 Systems trademarks,” said Robert Coleman, CEO of Six3 Systems, Inc.
“CACI’s acquisition of Six3 Systems, Inc. fits perfectly within the objectives of our strategic growth plan. It positions CACI with expanded capabilities to deliver high-value and in-demand solutions and services for our customers’ highest-priority national security and defense challenges. The acquisition of Six3 Systems is the largest in the company’s long and successful track record of more than 55 acquisitions that have delivered solid benefits for customers, shareholders, and employees of both CACI and the acquired companies. We are pleased to welcome Six3 Systems into CACI,” said Jack London, CACI Chairman of the Board.
“Mergers and acquisitions continue to be a successful part of our growth strategy and a key way we deliver long-term shareholder value. CACI has been following Six3 Systems, Inc. with great interest for some time. We are confident that this acquisition will further differentiate CACI in the market space. Both our companies are positioned to support national intelligence missions that require sophisticated technologies and services in areas we believe will be high priorities even in an environment of sequestration or budget constraints. Six3 Systems furthers our capability to meet our nation’s evolving needs in such areas as combating both peer and asymmetric adversaries and supporting the growing role of cyber in national and economic security. With this acquisition, we are investing in the advanced intelligence, situational awareness, and cybersecurity capabilities that are essential to safeguarding our country, as well as the intelligence operations and C4ISR capabilities that serve and protect our military forces,” noted Ken Asbury, President and CEO of CACI.
“The CACI/Six3 Transaction was a grand slam for all parties. GTCR (Six3’s financial sponsor) picked the right sport, National Security, the right manager, Bob Coleman, and the right hitters, great acquisitions. For the deal marketplace overall, this deal–along with Accenture’s recent ASM Research Health Care IT deal–provide meaningful benchmarks for well positioned business owners and strong evidence of long-term confidence in a GovCon market plagued by an oversupply of uncertainty,” said Bob Kipps, Managing Director of KippsDeSanto & Co.
“The acquisition of Six3 Systems, Inc. is consistent with our strategy to position CACI at the forefront of evolving Intelligence and DoD critical missions. Six3 Systems’ advanced capabilities using innovative methods and techniques will replace the expensive systems of the past and that is a big part of our focus. Like CACI, Six3 Systems focuses on enduring government missions, distinctive technologies, and critical national security missions. Our companies share a strong commitment to integrity, ethics, quality, and innovation. Six3 Systems’ highly experienced leadership team is well respected, with deep subject-matter expertise, and the company is a national asset for foreign systems intelligence in the national intelligence community and the Department of Defense. This acquisition positions us to offer high-end, affordable solutions to new and existing customers with a competitive advantage at the very highest levels,” John Mengucci, CACI Chief Operating Officer and President of U.S. Operations, said in the release.
Bank of America Merrill Lynch (BofA Merrill Lynch) served as CACI’s exclusive financial advisor to CACI and Squire Sanders (US) LLP and Latham & Watkins LLP acted as CACI’s legal advisors. BofA Merrill Lynch is also providing committed debt financing for the transaction. The Chertoff Group and CSP Associates worked as CACI’s strategic advisors.
A replay of an 8:00am conference call on Wednesday, October 9, 3013 will be available online, starting at 1:00 PM, and can be accessed through the CACI homepage under “CACI Investor Info”.
