Timing, structure, pricing surface on CACI $550 million credit facility

By Sara Rosenberg

New York, March 11 - Details on CACI International Inc.'s $550 million credit facility emerged on Thursday, including timing, structure and pricing, according to a market source. Banc of America Securities LLC is the lead bank on the deal.

The company is scheduled to hold a bank meeting in New York City on March 25 to launch the deal, according to the source.

Furthermore, it was disclosed that the facility consists of a $200 million five-year revolver with an interest rate of Libor plus 225 basis points and a 50 basis points undrawn fee, and a $350 million seven-year term loan B with an interest rate of Libor plus 225 basis points.

Proceeds will be used to finance the $415 million cash acquisition of American Management System Inc.'s Defense and Intelligence Group.

Closing on the acquisition is expected to take place by May and is conditioned on CGI Group Inc.'s successful completion of a tender offer for all of the outstanding shares of AMS for $19.40 per share or $858 million. The transactions are also subject to regulatory and government approvals.

Assuming the transaction is consummated in May, CACI estimates the acquisition of the Defense and Intelligence Group will add about $275 to $285 million to its fiscal year 2005 revenues and incremental earnings per share of about $0.14 to $0.17. The EBITDA margin for DIG in fiscal year 2005 is expected to be 15% to 17%, according to a company news release.

The company projected pro forma debt at June 30 of $415 million, pro forma debt/last-12-months EBITDA of 2.6 times at June 30, pro forma cash of $20 million and available borrowing capacity of $135 million under the new credit facility at June 30, company officials said during a conference call on Thursday.

"We're comfortable with that [debt-to-EBITDA level]," officials said in the call. "And, I think that our covenants in the bank agreement will get us down to about 3.0-to-1 ultimately. We've indicated before that's high for us. We don't like being that high. We feel very comfortable with the cash flows over the next several years. We'll get that down to a ratio that we'll be very comfortable with."

CACI is an Arlington, Va., provider of IT and network solutions. The Defense and Intelligence Group is a Fairfax, Va., provider of business management solutions to the U.S. government.

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