Public sector-serving technology and engineering firm Parsons Corporation has signed a $400 million deal to acquire infrastructure protection and C4ISR services organization Xator Corporation.
The business combination is aimed to grow Parsons’ reach to the U.S. special operations command and Intelligence Community sectors, as well as to federal civilian clientele and the global critical infrastructure market, the Centreville, Virginia-based company said Monday.
Carey Smith, CEO, president and chair of Parsons and a four-time Wash100 Award winner, said the Xator purchase adds “solutions and technologies that advance global security” and “continues our strategy of buying accretive, mission-focused companies aligned with global macroeconomic trends.”
Xator’s staff of over 900 employees (90 percent of whom carry security clearances) will bring skill sets in counter-unmanned aircraft systems, intelligence and cyber services, biometrics and global threat evaluation and operations. These capabilities are aimed to bolster Parsons’ offerings for the federal services and critical infrastructure markets, as well as gain a more trenchant relationship with the Department of State, which is undergoing budgetary expansion.
The acquisition is worth a total of $400 million — $343 constitutes Xator’s price tag, along with a net present value of a $57 million tax benefit, the result of 10.7x Xator’s adjusted EBITDA for 2023. The agreement is in-keeping with Parsons’ tendency of acquiring companies with revenue gains and adjusted EBITDA margins of 10 percent or higher that serve to bolster the company’s arsenal with new intellectual property.
“The joining of Parsons’ impressive capabilities in infrastructure and national security solutions, along with Xator’s capabilities in infrastructure protection, engineering, C4ISR, and national security will be a competitive force in the global infrastructure and national security markets,” remarked David Scott, CEO of Xator.
The transaction is scheduled to officially close later this quarter and Xator’s benefits are slated to be visible in Parsons’ 2023 adjusted earnings per share, revenue growth and adjusted EBITDA margin.
Parsons consulted with Goldman Sachs & Co. LLc and Latham & Watkins LLP for the transaction and Rees Broome, PC provided Xator consulting services.
