CACI Wins Defense Contract
Technical services provider CACI International (CACI) received a $10.8 million Department of Defense contract on Feb 14, 2014. A total of 15 Pentagon defense contracts worth $594.1 million were awarded to several listed companies, including AAR Corp. (AIR), Jacobs Engineering Group Inc. (JEC) and Raytheon Co. (RTN) among others.
The contract offers requisite funding to CACI for various on-site operational supports for the Office of the Under Secretary of Defense (Comptroller) through Feb. 15, 2015. The contract reinforces CACI’s presence in the high-growth integrated security solutions market. The company delivers highly specialized solutions and services that assist the government in safeguarding America’s servicemen in critical missions.
CACI has a large pipeline of new projects and continues to win deals at regular intervals. These back-to-back contract wins are the key catalysts for the company. Furthermore, having the government as a big client lends stability to the business and moderates fluctuations in revenues. Strategic acquisitions, new business initiatives and operational excellence are the primary driving factors for this Zacks Rank #3 (Hold) stock.
On Nov 15, 2013, CACI closed the $820 million acquisition of Six3 Systems, Inc. in cash. This was one of the largest transactions of its kind in history. The acquisition expanded CACI’s addressable market by approximately $15 billion. Furthermore, Six3 Systems has added distinctive cyberspace, C4ISR (Command, Control, Computers, Communications, Intelligence, Surveillance and Reconnaissance), and intelligence capabilities to CACI solutions and services and has augmented its customer base. CACI expects the acquisition to be at least 5% and 10% accretive to GAAP and adjusted earnings, respectively, for calendar year 2014.
Based in Arlington, Va., CACI delivers IT applications and infrastructure to improve communications and secure the integrity of information systems and networks; enhance data collection and analysis; and increase efficiency and mission effectiveness. CACI’s system-integration skills and intelligence expertise consume a significant portion of the funds earmarked for the Department of Homeland Security, while creating systems that facilitate sharing of critical information among all intelligence agencies.
CACI intends to drive operational excellence by intensively focusing on its organic and inorganic growth strategy and strengthening its existing customer relationships while building newer ones. In addition, the company anticipates to significantly benefit from its cost-reduction program. We believe the company is comfortably positioned, given its favored relationship with the Department of Defense.
Read the Full Research Report on RTN
Read the Full Research Report on JEC
Read the Full Research Report on AIR
Read the Full Research Report on CACI
Zacks Investment Research
