Parsons acquires Sealing Technologies for $200M

Parsons Corporation announced that it has acquired Maryland-based cyber and technology company Sealing Technologies in a transaction valued at up to $200M. SealingTech expands Parsons’ customer base across the Department of Defense and Intelligence Community. The transaction is consistent with Parsons’ strategy of completing accretive acquisitions of companies with revenue growth and adjusted EBITDA margins each exceeding 10%, while adding critical intellectual property that strengthens the company’s existing portfolio. SealingTech’s nearly 150 employees, 70% of whom hold security clearances, will be aligned to Parsons’ Defense & Intelligence business unit, with its capabilities being leveraged across both Parsons’ Federal Solutions and Critical Infrastructure segments, customers, and projects. Parsons is paying $175M of cash at closing for SealingTech, with an additional $25M earn out payable in Q1 of FY25 if certain revenue targets are met during 2024. After factoring in a $21M transaction-related tax benefit, the base purchase price implies a 10x multiple on SealingTech’s forecasted 2023e adjusted EBITDA before considering any revenue or cost synergies. Parsons estimates SealingTech will generate $110M of revenue in 2024 and that the transaction will be accretive to Parsons’ fiscal year 2024 revenue growth rate, adjusted EBITDA margin, and adjusted earnings per share. Barclays acted as financial advisor and Jenner & Block acted as legal advisor to Parsons. SealingTech was advised by Chesapeake Corporate Advisors and Nemphos Braue.