Parsons To Acquire Xator For $400M

CENTREVILLE, Va,, May 23, 2022 (GLOBE NEWSWIRE) — Parsons Corporation (NYSE:PSN) announced today that it has entered into a definitive agreement to acquire Xator Corporation in a transaction valued at $400 million. Founded in 2005, Xator expands Parsons’ customer base and brings differentiated technical capabilities in critical infrastructure protection, counter-unmanned aircraft systems (cUAS), intelligence and cyber solutions, biometrics, and global threat assessment and operations, increasing the company’s addressable market in both the federal solutions and critical infrastructure segments.

The acquisition expands Parsons’ presence within the U.S. Special Operations Command, the Intelligence Community, Federal Civilian customers, and global critical infrastructure markets, while providing new customer access at the Department of State, which is expected to experience significant budgetary growth.

“The addition of Xator is a natural extension of our growth strategy, adding important solutions and technologies that advance global security and protect critical infrastructure during a time of increasing and evolving threats,” said Carey Smith, Parsons’ chair, president, and chief executive officer. “This acquisition strengthens our position across our two complementary markets and continues our strategy of buying accretive, mission-focused companies aligned with global macroeconomic trends. I look forward to welcoming Xator’s talented team of more than 900 employees to the Parsons family as we collectively create the future.”

Headquartered in Reston, Va., Xator is a trusted provider of mission-focused solutions addressing critical infrastructure protection, national security, and mission training requirements for the U.S. Government around the world. With nearly 90% of the staff holding security clearances, the company develops full-spectrum Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) solutions, including integrated electronic and technical security systems, operations centers, force protection systems, cybersecurity, biometrics, and cUAS for global customers.

The transaction is consistent with Parsons’ strategy of completing accretive acquisitions of companies with revenue growth and adjusted EBITDA margins of 10% or greater, while adding critical intellectual property that strengthens the company’s existing portfolio. Xator will be primarily integrated into Parsons’ engineered systems business unit, with its global capabilities being leveraged across both the federal and critical infrastructure segments.

“Xator was built on a commitment to the customer’s mission and support for the professional development of our employees,” said David Scott, Xator’s chief executive officer. “Today we are excited to announce the combination with Parsons — a company that shares our passion for supporting our customers’ mission and is recognized consistently as a top employer. 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.”

The transaction is valued at approximately $343 million, including the net present value of a $57 million transaction-related tax benefit, or approximately 10.7x Xator’s estimated 2023 adjusted EBITDA. For 2023, Xator is expected to generate revenue of approximately $300 million. The transaction is expected to be accretive to Parsons’ 2023 adjusted earnings per share, revenue growth, adjusted EBITDA margin and close later this quarter, subject to customary closing conditions. Parsons was advised by Goldman Sachs & Co. LLC and Latham & Watkins LLP. Xator was advised by Rees Broome, PC.

About Parsons

Parsons (NYSE: PSN) is a leading disruptive technology provider in the national security and critical infrastructure markets, with capabilities across cybersecurity, missile defense, space, C5ISR, transportation, environmental remediation, and water/wastewater treatment. Please visit and follow us on LinkedIn and Facebook to learn how we’re making an impact.