CACI Discloses Terms of DSIC Acquisition

CACI International Inc. reported to the Securities and Exchange Commission Nov. 15 that it paid $47.4 million to buy Digital Systems International Corp., a transaction that moves the company closer to its stated goal of achieving $1 billion in revenue per year by 2005.

The deal was financed through CACI's existing credit facility, and added approximately 550 employees to the company, according to the quarterly statement filed with the SEC. Both companies are based in Arlington, Va.

DSIC had revenue of $55 million over the past 12 months. Tom Meagher, vice president of equity research with BB&T Capital Markets, Richmond, Va., said the purchase price was "right in the ballpark" of what companies typically pay for acquisitions.

Most of the acquisition transactions Meagher tracks come in with a purchase price between 50 percent and 100 percent of sales. "This is a little on the high end, but inside those parameters," he said.

The acquisition also is larger than usual for CACI, he said.

"Their typical range has been $20 million to $40 million," Meagher said. "What we're finding with CACI and the other [systems integrators] is that as they get bigger, the acquisitions have to get bigger," Meagher said.

For instance, CACI purchased NET Federal, a division of Net.com, in October 2000 for roughly $25 million, with one-year performance incentives in place that could increase the price to $40 million.