M&A

How CACI approaches integration when buying 'mission tech' businesses

CACI International continued to bolster its reputation as among the government market’s most serial acquirers with the Wednesday announcement in its earnings release that the company has made three more transactions.

These latest deals including that of defense software company Next Century Corp. follow the roughly $1 billion in acquisitions CACI made of LGS Innovations and Mastodon Design earlier this year.

But then comes the integration and how those businesses can remain who they are to a certain extent after being acquired. CACI CEO John Mengucci explained how the company thinks about that in his company’s first quarter earnings call Thursday.

“We like to connect them, but not fully integrate them. What makes a mission technology company great is the kind of creative culture and how those people within that acquired asset work together,” Mengucci told analysts. “Although we may put them in the same umbrella, we're really looking for those companies to come in and keep their unique and innovative kind of ways.”

Arlington, Virginia-based CACI sees the three acquired companies mentioned earlier (which brings total deal count to 79 since its 1962 launch) as helping bolster what it calls that mission technology part of its portfolio: largely of the national security variety, having a product component, and in domains like cybersecurity and space.

Just look at Next Century for instance. That Annapolis Junction, Maryland-based company provides software, cloud computing and other technology services for national security agencies in areas like geospatial intelligence, analytics, data fusion and machine learning.

Mission company number two in this latest trio of deals by CACI is Linndustries Shielding Specialties, of which its website does not reveal much detail. But CACI said in its earnings release that Linndustries “delivers hardened systems to protect from high altitude electromagnetic pulses and other electromagnetic interference.”

Acquisition number three is of U.K.-based application development outfit Deep3 to add more data analytics, digital transformation and cybersecurity work for defense agencies in that country. CACI made two acquisitions of software companies in the U.K. three years ago and is eyeing that country as a key market for the future.

“It's safe to say that we'll use our U.K. business as a beachhead of sorts from where we can deliver and support mission technology to those countries that our buying and are looking to buy our products as well as establish ourselves to facilitate direct sales to the U.K. government,” Mengucci said.

“The fact that we have a large, a material well-established 30-plus year business there with great customers relationships who knows how to do business in the U.K., really sets especially Mastodon up very, very well to be delivering their (signals intelligence) and their (electronic warfare) products directly into that marketplace.”

On the financial front, the three acquisitions and award activity led CACI to lift slightly lift the top end of its fiscal year 2020 revenue guidance to $5.75 billion from $5.7 billion. The bottom end stayed at $5.5 billion.

Fiscal first quarter awards of $4 billion helped CACI get its book-to-bill to around 2.3x on a trailing 12-month basis: a sign CACI’s backlog of contracts is growing faster than drawdowns from it to book sales.

Funded backlog at Sept. 30 climbed 21 percent from the same period last year to $3.3 billion, while total backlog grew 49 percent to $19.5 billion.

CACI also nudged up its net income forecast to $298 million-$315 million from the prior $298 million-$318 million range.

About the Author

Ross Wilkers is a senior staff writer for Washington Technology. He can be reached at rwilkers@washingtontechnology.com. Follow him on Twitter: @rosswilkers. Also find and connect with him on LinkedIn.

Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here
close

Trending

  • POWER TRAINING: How to engage your customers

    Don't miss our Aug. 2 Washington Technology Power Training session on Mastering Stakeholder Engagement, where you'll learned the critical skills you need to more fully connect with your customers and win more business. Read More

  • PROJECT 38 PODCAST

    In our latest Project 38 Podcast, editor Nick Wakeman interviews Tom Romeo, the leader of Maximus Federal about how it has zoomed up the 2019 Top 100. Read More

contracts DB

Washington Technology Daily

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.