CACI Enters into Definitive Agreement to Purchase Azure Summit Technology

Rhea-AI Summary

CACI International Inc (NYSE: CACI) has announced a definitive agreement to acquire Azure Summit Technology for $1.275 billion in an all-cash transaction. This strategic acquisition aims to enhance CACI's capabilities in intelligence, surveillance, reconnaissance (ISR), electronic warfare (EW), and signals intelligence (SIGINT) across multiple domains and platforms.

The deal is expected to be immediately accretive across multiple financial metrics and includes a tax benefit with a present value of $194 million over 15 years. The effective consideration, net of the tax benefit, is $1.08 billion. The transaction is subject to regulatory approvals and is anticipated to close in the second quarter of fiscal year 2025.

Positive

• Acquisition of Azure Summit Technology for $1.275 billion, expanding CACI's capabilities in ISR, EW, and SIGINT
• Expected to be immediately accretive across multiple financial metrics
• Tax benefit with a present value of $194 million over 15 years
• Alignment with CACI's mission to deliver expertise and technology for national security challenges
• Expansion of offerings across multiple domains, platforms, and customer sets

Negative

• Significant cash outlay of $1.275 billion for the acquisition
• Regulatory approvals required, which may delay or potentially hinder the transaction
• Integration risks associated with merging two companies and their technologies

Insights

Financial Analyst

CACI's $1.275 billion acquisition of Azure Summit Technology is a significant move that strengthens its position in the defense technology sector. The deal's immediate accretive impact across multiple financial metrics is promising for shareholders. The $194 million tax benefit over 15 years effectively reduces the net consideration to $1.08 billion, enhancing the deal's value. This strategic acquisition, combined with $400 million in recent share repurchases, demonstrates CACI's commitment to shareholder value and free cash flow growth. However, investors should monitor how CACI manages the integration process and leverages Azure Summit's capabilities to drive long-term growth in the competitive defense technology market.

Defense Technology Expert

This acquisition significantly bolsters CACI's capabilities in critical areas of RF technology, ISR, EW and SIGINT. Azure Summit's expertise in electromagnetic spectrum operations aligns perfectly with evolving defense priorities, particularly in multi-domain operations. The deal provides CACI with an installed base of mature, fielded technology, which is important for rapid integration and deployment. This move positions CACI to better address the DoD's increasing focus on electromagnetic spectrum dominance and information warfare. The synergy between the two companies' cultures and engineering heritage could drive innovation, potentially leading to next-generation solutions in spectrum management and electronic warfare capabilities.

Market Research Analyst

CACI's acquisition of Azure Summit is a strategic move in the rapidly evolving defense technology market. With global threats escalating, demand for advanced ISR, EW and SIGINT capabilities is likely to grow. This deal expands CACI's offerings across multiple domains and platforms, potentially opening new customer sets. The cultural alignment between the companies is important for retaining key talent and maintaining innovation momentum. However, the defense sector is highly competitive, with other major players also investing heavily in similar technologies. CACI will need to leverage this acquisition effectively to maintain a competitive edge and capitalize on emerging opportunities in the global defense market landscape.

RESTON, Va.--(BUSINESS WIRE)-- CACI International Inc (NYSE: CACI) announced today that it has entered into a definitive agreement to acquire Azure Summit Technology in an all cash transaction for $1.275 billion. In alignment with CACI’s mission to deliver distinctive expertise and differentiated technology to meet our customers’ greatest national security challenges, Azure Summit advances Department of Defense (DoD) mission outcomes with its portfolio of high-performance radio frequency (RF) technology and engineering talent focused on the electromagnetic spectrum.

“Azure Summit’s core capabilities and technology bolster CACI’s market-based strategy by expanding our offerings in intelligence, surveillance and reconnaissance (ISR), electronic warfare (EW), and signals intelligence (SIGINT) across multiple domains, platforms and customer sets,” said John Mengucci, CACI President and Chief Executive Officer. “In an environment of escalating global threats, the employees of both CACI and Azure Summit are culturally aligned and driven to support the most critical, sophisticated missions of our nation and our allies.”

“For our shareholders, the acquisition of Azure Summit is compelling both strategically and financially,” said Mengucci. “It not only enhances our offerings in areas of enduring national security priorities, but also brings with it an installed base of fielded, mature technology. And, from a financial standpoint, it will be immediately accretive across multiple financial metrics.”

“When combined with more than $400 million in share repurchases over the last six quarters, this transaction underscores CACI’s flexible and opportunistic capital deployment approach, which focuses on driving free cash flow growth and delivering long-term shareholder value,” said Mengucci.

“I am confident that CACI will offer outstanding career opportunities to our talented and dedicated employees,” said Azure Summit President and Chief Executive Officer Thomas Green. “The alignment between our cultures, technology and engineering heritage will drive continued innovation and growth under CACI leadership in the future. More importantly, our mission-focused customers will share the benefits from the combined business almost immediately.”

As a result of the $1.275 billion all-cash transaction, CACI expects to realize a tax benefit over the next 15 years, the present value of which is $194 million. Net of the present value of the tax benefit, the effective consideration is $1.08 billion. The transaction is subject to regulatory approvals and customary closing conditions and is expected to close in the second quarter of fiscal year 2025.

A conference call hosted by President and CEO John Mengucci and Chief Financial Officer Jeff MacLauchlan will be held this morning at 8:30 a.m. Eastern time to discuss this transaction. Details can be found on the CACI Investor Relations website.

About Azure Summit Technology

Azure Summit is an engineering company that develops and delivers high-performance RF hardware and software defined technologies for applications that deliver critical capabilities to address high priority existing and emerging missions for national security. Azure Summit has a diverse team of qualified engineers and mission subject matter experts (SMEs) with backgrounds in electrical, mechanical, RF, hardware, software, and systems engineering offering innovative signal processing solutions to challenging problems on platforms ranging from UAVs to manned aircraft and maritime platforms.

About CACI

At CACI International Inc (NYSE: CACI), our 24,000 talented and dynamic employees are ever vigilant in delivering distinctive expertise and differentiated technology to meet our customers’ greatest challenges in national security. We are a company of good character, relentless innovation, and long-standing excellence. Our culture drives our success and earns us recognition as a Fortune World's Most Admired Company. CACI is a member of the Fortune 1000 Largest Companies, the Russell 1000 Index, and the S&P MidCap 400 Index. For more information, visit us at www.caci.com.

There are statements made herein which do not address historical facts, and therefore could be interpreted to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. The factors that could cause actual results to differ materially from those anticipated include, but are not limited to, the risk factors set forth in CACI’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024, and other such filings that CACI makes with the Securities and Exchange Commission from time to time. Any forward-looking statements should not be unduly relied upon and only speak as of the date hereof.

CACI-News-Business Wire

View source version on businesswire.com: https://www.businesswire.com/news/home/20240915990926/en/

Corporate Communications and Media:

Lorraine Corcoran

Executive Vice President, Corporate Communications

(703) 434-4165, lorraine.corcoran@caci.com

Investor Relations:

George Price

Senior Vice President, Investor Relations

(703) 841-7818, george.price@caci.com

Source: CACI International Inc

FAQ

What is the value of CACI's acquisition of Azure Summit Technology?

CACI International Inc (NYSE: CACI) has agreed to acquire Azure Summit Technology for $1.275 billion in an all-cash transaction.

When is the Azure Summit Technology acquisition by CACI expected to close?

The acquisition is expected to close in the second quarter of fiscal year 2025, subject to regulatory approvals and customary closing conditions.

How will the Azure Summit Technology acquisition benefit CACI's capabilities?

The acquisition will enhance CACI's offerings in intelligence, surveillance, reconnaissance (ISR), electronic warfare (EW), and signals intelligence (SIGINT) across multiple domains and platforms.

What is the tax benefit associated with CACI's acquisition of Azure Summit Technology?

CACI expects to realize a tax benefit over 15 years with a present value of $194 million, effectively reducing the net consideration to $1.08 billion.