Parsons Corporation (NYSE:PSN) announced today that it has entered into a definitive agreement to acquire BlackSignal Technologies, LLC, a Razor’s Edge portfolio company, in an accretive deal valued at $200 million. Parsons anticipates that the acquisition will close in August 2024.
BlackSignal is a next-generation digital signal processing, electronic warfare, and cybersecurity provider built to counter near-peer threats. This acquisition will expand Parsons’ customer base across the Department of Defense and Intelligence Community and significantly strengthen Parsons’ positioning with full-spectrum cyber and electronic warfare, while adding new capabilities in the counterspace radio frequency domain: markets anticipated to grow more than 10% annually with double digit margin expectations. BlackSignal uses artificial intelligence and machine learning to create innovative signal processing techniques that detect and disrupt difficult-to-access command and control systems and platforms.
The transaction is consistent with Parsons’ strategy of acquiring high-growth companies with greater than 10% revenue growth and adjusted EBITDA margins. BlackSignal will be integrated into Parsons’ Defense & Intelligence business unit.
“Parsons’ acquisition of BlackSignal will represent a strategic enhancement to our cyber and intelligence and electronic warfare capabilities, reinforcing our commitment to quickly delivering mission-essential solutions that address our customer’s national security requirements,” said Carey Smith, Parsons’ chair, president, and chief executive officer. “Our purpose-built Federal Solutions portfolio is addressing national security threats from near-peer adversaries that are becoming increasingly aggressive with rapidly evolving advanced technologies. I am excited that we will welcome BlackSignal’s accomplished team into Parsons.”
Headquartered in Chantilly, Va., BlackSignal’s culture of innovation and disruption delivers differentiated solutions to address national security challenges related to near-peer threats for the Defense Department and Intelligence Community. The company’s space, cyber, electronic warfare, and digital signal processing capabilities include full-spectrum cyber solutions and tool development; space-based, artificial intelligence-enhanced signal processing; and tactical communication and intelligence systems.
“There is complete alignment with our culture and values, and we share a common passion for supporting our nation’s most pressing security challenges while promoting a people-first culture,” said Ned Zimmer, chief executive officer of BlackSignal. “This partnership will be a force multiplier for our warfighters, accelerate our business growth, and expand our customer base, while providing exciting new opportunities for our employees. I am excited about our future together and to become part of the Parsons team.”
The $200 million cash purchase price represents a 10.5x multiple on the forecasted 2025 EBITDA before considering revenue or cost synergies. Parsons expects that BlackSignal will generate approximately $95m of revenue in 2025e and be accretive to Parsons’ revenue growth, adjusted EBITDA margins, and adjusted EPS. The transaction is expected to close in August 2024, subject to customary closing conditions. Parsons was advised by Raymond James and BlackSignal was advised by Baird.
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