Parsons details to investors its most recent purchase of a business that focuses on transportation engineering at the state level, but whose work could have meaning at the federal level as well.
As Parsons Corp. sees it, the acquisition leg of its overall strategy can and should cut across both of its core customer sets in the federal government and critical infrastructure verticals.
Parsons is touting its most recent purchase as continuing on that theme, along with two other businesses it has brought in over the course of this year.
In Parsons Corp.'s third quarter earnings call with investors, the company revealed its $11.5 million buy of transportation engineering consultancy I.S. Engineers that closed in October.
I.S. Engineers is headquartered in Texas, a state that is poised to receive approximately $30 billion in total transportation funding from the Infrastructure Investment and Jobs Act between 2022 and 2026.
"While that's predominantly on our critical infrastructure side, some of the work they do there can also help our engineered systems group on the federal side of the house," Parsons chief executive Carey Smith told analysts on the call.
That group concentrates on U.S. federal infrastructure projects at agencies such as the Federal Aviation Administration and departments of Energy and Homeland Security.
Parsons' main technical services contract at the Federal Aviation Administration falls under the engineered systems group's purview, given that program's scope of infrastructure modernization work at airports.
Centreville, Virginia-headquartered Parsons' other two major acquisitions of 2023 include the $200 million purchase of defensive cyber specialist Sealing Technologies and $43 million buy of IPKeys Power Partners, the latter of which does similar work for utilities and grid operators.
But Parsons is looking at ways to make what Smith called "crossover" success a reality for the company.
A bulk of SealingTech's work to-date has been with defense and intelligence agencies, but Smith indicated that Parsons is looking for commercial applications of that business' flyaway kit product line that works to enable defensive cyber.
"We're looking at combining their capabilities with the IPKeys capabilities and new product offerings," Smith added.
IPKeys provides cyber compliance and monitoring solutions to utilities that are subject what is set by the North American Energy Regulatory Commission and Federal Energy Regulatory Commission.
"Cyber will be an area that we continue to make acquisitions and it's one where I might feel that we've bought discriminating companies," Smith said. "t's enabled us to win critical jobs like the $1.2 billion (General Services Administration) job we highlighted last quarter."
Third quarter revenue of $1.4 billion was 25% higher than the prior year period and represents a 23% organic growth rate after excluding acquired sales. Profit of $128 million shows a 24% year-over-year increase in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).
Parsons Corp.'s updated full-year financial guidance now has revenue firmly above the $5 billion mark for the first time in its history, or to be more precise the range of $5.175 billion-to-$5.325 billion. The prior outlook saw sales of $4.85 million-to-$5.05 billion.
The company also has a higher bottom-line outlook of $440 million-to-$460 million adjusted EBITDA, up from the prior $410 million-to-$440 million range.