CACI-makes $550M deal for L-3 unit

UPDATE: At 8 a.m. this morning (Tuesday) CACI International announced its intent to acquire L-3's National Security Solutions business for $550 million. The deal is expected to close by March.

The acquisition adds 4,000 employees and $1 billion in revenue to CACI. The company said it will expand opportunities in enterprise IT, intelligence services and key market areas.

CACI is holding a teleconference at 11 a.m. this morning. We'll update with more details after that.

Below is what I wrote yesterday about reports that the deal was imminent.

Over the last week, several published reports are saying that CACI International is on the verge of buying L-3’s National Security Solutions business.

The value of the deal has been estimated at $550 million according to reports by Investor’s Business Daily and Reuters.

If the deal happens – and CACI, to no surprise, isn’t saying anything – it would be the company’s largest deal since it spent $820 million to acquire Six3 Systems in 2013.

L-3 National Security Solutions offers services around big data, command and control systems, enterprise and mission IT, cyber, security and intelligence operations support.

It has been described by Reuters as lower margin work compared to the rest of L-3. The company wants to focus on communications and defense electronics.

It’s a similar story we’ve heard from other defense companies, who have sold off services businesses in the last few years. In fact, this is the second spin-off for L-3; In 2012, it spun out Engility as a public company.

Lockheed Martin also is in the process of selling its IT business, which has $5 billion in annual revenue.

On Wall Street, CACI has been on a high lately. On Dec. 1, the company hit its 52-week high of 103.89, compared to its low for the year of $72.18.

As report circulated that it was ready to by L-3 National Security Solutions, the stock has dipped slightly to $99.