Even companies that aren’t performing as well are still seeming to be doing just fine under sequestration so far as profits go. General Dynamics, which is the third-largest provider of services to the federal government, saw its shares on the New York Stock Exchange drop slightly after announcing its profit forecast for the rest of the year. Despite that, the company still saw a net income of $651 million in the third quarter, up from $600 million at the same point last year.

The continued success of these companies matches the predictions of CAP experts Lawrence Korb and Alex Rothman last year, though the sequestration vehicle has been less discriminating about military cuts than many security experts would have preferred. The defense industry spent a large amount of time and capital last year hyping the threat that not just sequestration but any cuts to the military budget would have on their industries, even as experts expressed their doubts in the claims.

Sequestration also hasn’t prevented contractors from being paid far more than their federal employee counterparts. The Office of the Director of National Intelligence recently reported that the intelligence community pays contractors 1.66 times as much as a federal employee for the same work. An analysis from the Pentagon earlier this month also found that the Pentagon could save millions if it would only reduce the payout to some contractors to only as much as President Obama’s salary.

Despite that amount of overpay still present, and the overinflated threat to the overall economy the industry said would result from sequestering the military budget, the growing profits of these contracting firms may be coming at a cost to the workers who make up the companies. Lockheed Martin — the top government contractor — on Tuesday announced that it cut 600 workers last week from its Mission Systems and Training unit, after furloughing approximately 2,400 workers during the shutdown. Since the sequester took effect, firms like Lockheed have been able to cut costs and “frankly, downsize in some cases,” Marion Blakey, president and CEO of the Aerospace Industries Association, said on Bloomberg Television, in order to keep investors happy.

And while companies may be increasing their shareholders’ pay-off at the end of the year, sequestration has managed to hinder national security in other ways. In June of this year, the Defense Department announced that it would be unable to perform routine background checks on security clearance holders in light of budget cuts. Meanwhile, the Pentagon said in June that if sequestration is not lifted before 2014, 6,000 workers could see themselves unemployed, while another 650,000 civilian defense workers began experiencing furlough days running from July through September.

The transaction will expand CACI's high-growth Cyberspace market as well as build on CACI's capabilities in its high-volume C4ISR (command, control, communications, computers, intelligence, surveillance, and reconnaissance) and Intelligence market areas. Six3 Systems employs approximately 1,600 professionals worldwide, and its calendar year 2013 revenue is expected to be approximately $470 million. The purchase price is $820 million and closing is anticipated during CACI's fiscal second quarter, ending December 2013, subject to regulatory approvals.

Headquartered in McLean, Virginia and with operations around the world, Six3 Systems provides highly specialized and differentiated strategic solutions, services, and products for the country's most sensitive national security agencies and Department of Defense (DoD) critical missions for customers in the Intelligence, Defense, and Civilian communities. The transaction is expected to be at least 5 percent accretive to CACI's GAAP earnings per share in calendar year (CY) 2014 and at least 10 percent accretive to diluted adjusted earnings per share. As part of this transaction, CACI has secured a firm financing commitment for $800 million. CACI will finance the acquisition through this new commitment and borrowings under its existing revolving credit facility.

Dr. J.P. (Jack) London, CACI Chairman of the Board, noted, "CACI's acquisition of Six3 Systems, Inc. fits perfectly within the objectives of our strategic growth plan. It positions CACI with expanded capabilities to deliver high-value and in-demand solutions and services for our customers' highest-priority national security and defense challenges. The acquisition of Six3 Systems is the largest in the company's long and successful track record of more than 55 acquisitions that have delivered solid benefits for customers, shareholders, and employees of both CACI and the acquired companies. We are pleased to welcome Six3 Systems into CACI."

Ken Asbury, CACI President and Chief Executive Officer, said, "Mergers and acquisitions continue to be a successful part of our growth strategy and a key way we deliver long-term shareholder value. CACI has been following Six3 Systems, Inc. with great interest for some time. We are confident that this acquisition will further differentiate CACI in the market space. Both our companies are positioned to support national intelligence missions that require sophisticated technologies and services in areas we believe will be high priorities even in an environment of sequestration or budget constraints. Six3 Systems furthers our capability to meet our nation's evolving needs in such areas as combating both peer and asymmetric adversaries and supporting the growing role of cyber in national and economic security. With this acquisition, we are investing in the advanced intelligence, situational awareness, and cybersecurity capabilities that are essential to safeguarding our country, as well as the intelligence operations and C4ISR capabilities that serve and protect our military forces."

According to John Mengucci, CACI Chief Operating Officer and President of U.S. Operations, "The acquisition of Six3 Systems, Inc. is consistent with our strategy to position CACI at the forefront of evolving Intelligence and DoD critical missions. Six3 Systems' advanced capabilities using innovative methods and techniques will replace the expensive systems of the past and that is a big part of our focus. Like CACI, Six3 Systems focuses on enduring government missions, distinctive technologies, and critical national security missions. Our companies share a strong commitment to integrity, ethics, quality, and innovation. Six3 Systems' highly experienced leadership team is well respected, with deep subject-matter expertise, and the company is a national asset for foreign systems intelligence in the national intelligence community and the Department of Defense. This acquisition positions us to offer high-end, affordable solutions to new and existing customers with a competitive advantage at the very highest levels." Six3 Systems, Inc. Chief Executive Officer Robert Coleman said, "We look forward to bringing our advanced solutions and capabilities along with our team of highly skilled professionals to CACI. We share in CACI's dedication to our nation's most critical missions, and we believe the acquisition will be a win-win situation for both firms: Six3 Systems will benefit from the larger resource and customer space that CACI offers, and CACI will benefit from the leading-edge technical capabilities and innovation that are Six3 Systems trademarks." BofA Merrill Lynch acted as exclusive financial advisor to CACI. Squire Sanders (US) LLP and Latham & Watkins LLP served as CACI's legal advisors. BofA Merrill Lynch is providing committed debt financing for the transaction. The Chertoff Group and CSP Associates served as strategic advisors to CACI.