CACI International (NYSE:CACI) executives outlined plans to acquire Arca Group in an all-cash deal they said will expand CACI’s position in the national security space market, add complementary sensing and intelligence-processing technologies, and support longer-term growth in revenue and free cash flow per share.
On a conference call discussing the pending transaction, President and CEO John Mengucci described Arca as a “leading technology provider to the national security space community” and said the acquisition aligns with CACI’s stated M&A focus areas over the past year, including electronic warfare and space. Chief Financial Officer Jeff MacLauchlan and Chief Technology Officer Jason Bales also participated.
Strategic rationale: sensing, “sense-making,” and adjacent optical technologies
- Sensing: Space-based imaging and remote sensing technology provided to national security customers, including through prime satellite contractors. Mengucci said Arca is “one of only a few companies” capable of providing advanced imaging payloads and that its technology is deployed across “all orbits.” He referenced initiatives including Golden Dome and support of INDOPACOM.
- Sense-making: Software-based capabilities for end-to-end intelligence generation, including radar and image processing, mission management, and sensor orchestration. CACI emphasized Arca’s “first mover” position in operationalizing agentic AI-based systems in classified environments to automate intelligence production and related functions.
- Other optical technology: Laser warning systems and directed energy components, which management described as adjacent capabilities that could provide “optionality” alongside CACI’s own optical work.
Management framed the combination as extending CACI’s sensor portfolio beyond its land, air, and sea deployments into space-based imaging. The company also emphasized an opportunity to combine Arca’s GEOINT-related ground processing with CACI’s SIGINT processing to broaden multi-source intelligence (multi-INT) capabilities. Bales said Arca’s processing supports electro-optical IR sensor data workflows for “detection of threats,” and that combining that with CACI’s SIGINT exploitation could strengthen a multi-INT portfolio for missions such as Golden Dome and INDOPACOM.
Financial terms and expected impact
MacLauchlan said CACI will acquire Arca for an all-cash purchase price of $2.6 billion. Due to transaction structuring, CACI expects an ongoing tax benefit with a stated present value of $225 million, resulting in effective consideration of $2.375 billion. Based on “next 12 months’” performance, management characterized the deal as a 16x EBITDA multiple.
Over the next 12 months, CACI expects Arca to deliver approximately $650 million of revenue and $145 million of EBITDA. Management described Arca as having a track record of double-digit revenue growth and EBITDA margins in the low 20% range. The company said the acquisition will be “highly accretive” to CACI’s revenue growth and EBITDA margin.
On earnings and cash flow, MacLauchlan said that after accounting for one-time transaction-related expenses, the deal is expected to be neutral to adjusted EPS and free cash flow in fiscal 2027 (the first full year) and firmly accretive in fiscal 2028. CACI said it will provide updated fiscal 2026 guidance after closing.
Financing and leverage expectations
MacLauchlan said CACI executed a committed bridge facility alongside the purchase agreement and expects permanent financing to be in place at closing. Based on current market conditions, the company plans to issue $1.3 billion of new transaction debt made up of:
- $800 million of a new seven-year Term Loan B
- $500 million of senior notes
The remainder of the purchase price is expected to be funded under CACI’s existing revolving credit facility. Management expects the deal to close near the end of CACI’s third quarter of fiscal 2026, subject to regulatory approvals and customary conditions.
Post-closing, CACI expects leverage of 4.3x net debt to trailing 12 months pro forma EBITDA. While noting its stated target range of 2.5x to 3.0x, management said it has been willing to go higher for the “right opportunity.” CACI expects leverage to return to “the low threes” within six quarters of closing based on combined cash flow characteristics.
Business profile, backlog visibility, and classified nature
MacLauchlan said approximately 90% of Arca’s revenue is with national security customers and pointed to a “high fixed-price” mix tied to IP-based differentiation. During Q&A, management said Arca has “virtually nothing” in terms of notable recompete exposure in 2026 and even into 2027, adding that “greater than 90%” of Arca’s fiscal 2026 financial position is “locked and loaded” through execution or backlog.
On backlog, management described a distinction between contracted backlog and longer-horizon franchise positions. MacLauchlan cited about $600 million “under contract,” plus more than $2 billion in a five-year planning window of “non-competitive franchise” revenue tied to named programs and proliferated systems.
Executives repeatedly noted the classified nature of much of Arca’s work, limiting program-level detail. Mengucci said customer specifications are “tight” and that decisions on payloads are largely made by the end customer, with Arca’s sensors “get[ting] a ride on somebody else’s satellite.” He also characterized barriers to entry as “extremely high,” citing long-standing production requirements and specialized talent, including roughly 1,000 engineering personnel at Arca, with more than a third described as software engineers working on ground processing.
In response to questions about Arca’s exposure to SDA and SpaceX, management said Arca has “a small role” in the SDA world and that its focus is “highly classified intel space assets,” with the company planning to share more after closing.
About CACI International (NYSE:CACI)
CACI International Inc is a leading provider of information solutions and services to the U.S. federal government, with a primary focus on defense, intelligence, homeland security and federal civilian agencies. The company delivers advanced technology and domain expertise to support mission-critical operations, offering capabilities in areas such as data analytics, cyber security, network integration, enterprise IT modernization and logistics support. By integrating software, hardware and professional services, CACI helps clients enhance situational awareness, improve decision making and maintain critical infrastructure resilience.
Founded in 1962 and headquartered in Arlington, Virginia, CACI has evolved from a small consulting operation into a global enterprise.
