RESTON, Va. - CACI International Inc (NYSE: CACI) announced its intention to acquire Azure Summit Technology, a provider of radio frequency (RF) technology, in an all-cash transaction valued at $1.275 billion. The deal, expected to close in the second quarter of fiscal year 2025, is subject to regulatory approvals and customary closing conditions.
The acquisition is set to enhance CACI's portfolio in intelligence, surveillance and reconnaissance (ISR), electronic warfare (EW), and signals intelligence (SIGINT). CACI's President and Chief Executive Officer, John Mengucci, emphasized the strategic and financial benefits of the acquisition, stating that it would be immediately accretive to multiple financial metrics and that it aligns with the company's mission to address national security challenges.
Mengucci also highlighted the cultural and technological synergy between CACI and Azure Summit, expressing confidence in the growth and innovation that the combined entity would foster. Additionally, the acquisition is expected to offer career opportunities for Azure Summit employees and immediate benefits for mission-focused customers.
CACI anticipates a tax benefit from the transaction, with a present value of $194 million, effectively reducing the consideration to $1.08 billion. This move underscores CACI's capital deployment strategy aimed at driving free cash flow growth and enhancing long-term shareholder value.
Azure Summit Technology, known for its high-performance RF hardware and software-defined technologies, supports critical national security missions with a diverse team of engineers and subject matter experts. The company's solutions are deployed across various platforms, including unmanned aerial vehicles (UAVs), manned aircraft, and maritime platforms.
CACI, recognized as a Fortune World's Most Admired Company, employs 24,000 individuals and is a member of the Fortune 1000 Largest Companies, the Russell 1000 Index, and the S&P MidCap 400 Index.
The information in this article is based on a press release statement.
In other recent news, CACI International has made noteworthy strides in its business operations. The defense contractor announced its plans to acquire an undisclosed company, marking a strategic move in expanding its national security-related services. On the financial front, the company reported a 20% increase in Q4 revenue and a 14% rise for the full fiscal year, surpassing its own guidance. This robust performance was accompanied by a record $14 billion in contract awards, and a backlog that rose to $32 billion, marking a 22% year-on-year increase.
Analysts from BofA Securities and Baird have expressed optimism about CACI's future. BofA Securities raised the stock's price target from $450.00 to $535.00 and maintained a Buy rating, while Baird increased its price target to $544. Truist Securities also maintained a Buy rating on the stock, increasing its price target to $520 from $500.
In addition to these developments, CACI secured several significant contracts, including an $80 million task order to provide engineering support to the U.S. Navy's Naval Sea Systems Command, and a potential six-year, $239 million task order from the U.S. Army to provide intelligence analysis and operations support to U.S. forces in Europe and Africa.
For fiscal year 2025, CACI projects a revenue growth of 6% to 8.5%, with an expected 11% increase in free cash flow per share. The company's revenue is estimated to be between $7.9 billion and $8.1 billion, with adjusted net income projected between $505 million and $525 million. Lastly, CACI has been recognized with two Nunn-Perry Awards for its mentorship excellence under the Department of Defense Mentor Protégé Program, highlighting the company's commitment to fostering growth and innovation among small businesses.
InvestingPro Insights
As CACI International Inc (NYSE: CACI) prepares to enhance its capabilities with the acquisition of Azure Summit Technology, investors and stakeholders may find the following metrics and tips from InvestingPro valuable in assessing the company's financial health and stock performance.
InvestingPro Data shows that CACI has a market capitalization of $10.62 billion, reflecting its substantial size in the defense and information technology sector. The company's Price to Earnings (P/E) ratio stands at 25.38, indicating how much investors are willing to pay for a dollar of earnings, which is high in relation to near-term earnings growth – a point also highlighted by an InvestingPro Tip. This high P/E ratio could suggest that the market has high expectations for the company's future growth, aligning with CACI's strategic acquisitions and expansion efforts.
In terms of performance, CACI has experienced a significant price uptick over the last six months, with a 27.79% total return, and is trading near its 52-week high at 97.35% of that value. This robust performance is further evidenced by a one-year price total return of 49.81%, showcasing the stock's strong momentum in the market.
InvestingPro Tips also note that CACI operates with a moderate level of debt, which could provide some financial flexibility as it pursues growth through acquisitions like that of Azure Summit Technology. Moreover, the company is predicted to be profitable this year and has been profitable over the last twelve months, reinforcing the potential for sustained financial health post-acquisition.
For those interested in more in-depth analysis and additional insights, there are 10 more InvestingPro Tips available for CACI at https://www.investing.com/pro/CACI. These tips could offer investors a more comprehensive understanding of the company's stock performance and financial status as it continues to navigate the ever-evolving defense and technology sectors.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.