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Inside CACI's Six3 Systems deal

Yesterday, I explored the strategic thrust behind CACI International’s $820 million deal for Six3 Systems Inc.

A quick recap: CACI gets more solutions and product business, which equals higher margins. The company also will be picking up more cyber and command and control, or C5ISR, business. Also, CACI will get more work with intelligence agencies.

The idea that CACI CEO Ken Asbury described is that CACI has been trying to shift more of its business from the lower margin services to higher margin solutions, and Six3 helps them on that path.

Today, I want to look at some underlying numbers that give a fuller snapshot of what CACI is buying, and how Six3 will fit into the company.

Value: $820 million cash, financed through borrowings and new $800 million financing commitment.

Closing: By end of December.

Revenue: $470 million, which will bring CACI to $4.1 billion in annual revenue.

Margins: 14 percent for Six3; 9 percent for CACI. Combined EBITDA margins: 10 percent.

Growth: Six3 had $238 million in revenue in 2009, expected 2013 revenue is $470 million, for a compound annual growth rate of 19 percent. But growth in 2014, however, is expected to slow, according to analysts.

People: 1,600 employees

Leadership:

  • Bob Coleman, CEO
  • Jack Pearlstein, CFO and EVP
  • Ryan Wagener, EVP, business development
  • Mike Zembrzuski, EVP, intelligence solutions group
  • Tom Ladd, EVP, intelligence, surveillance and reconnaissance group
  • Mike Kushin, CTO and EVP, cyber technical services
  • Robin Rhiner, SVP, human resources

Work: 80 percent of Six3’s work is as a prime contactor

Major customers: NRO, Defense Intelligence Agency, Navy, NSA, Special Operations Command.

Business mix for Six3: 70 percent to 75 percent intelligence work; 20-some percent defense; small amount of civilian work.

Type of work: For Six3: 20 percent product; 80 percent – 2/3s high end solutions; 1/3 services. For CACI: 40 percent solutions; 60 percent services.

Six3 contract mix:

  • 50 percent fixed price
  • 20 percent cyber-related work
  • 80 percent C5ISR
  • 10 percent from work in Afghanistan expected to drop with drawdown.

Posted by Nick Wakeman on Oct 10, 2013 at 10:09 AM


Reader Comments

Tue, Oct 15, 2013

Why did Six3 decide to sell if they were doing so well?

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