Parsons acquires Md. federal contractor for $200M

Centreville-based Fortune 1000 defense contractor Parsons has acquired Maryland-based contractor Sealing Technologies in a deal valued at $200 million.

Parsons announced the deal Wednesday. The acquisition expands Parsons’ customer bases across the Department of Defense’s intelligence community and enhances its capabilities in defense cyber operations, integrated mission-solutions powered by artificial intelligence and machine learning, edge computing, critical infrastructure protection and secret data management.

SealingTech has nearly 150 employees, 70% of whom hold security clearances. Those employees will become part of Parsons’ defense and intelligence business unit, with capabilities being leveraged across its federal solutions and critical infrastructure segments, customers and projects, according to a Parsons news release.

“The addition of SealingTech is a natural extension of our growth strategy, adding critical, mission-ready solutions for our Department of Defense and intelligence community customers,” Carey Smith, Parsons’ chair, president and CEO, said in a statement. “SealingTech’s defensive cyber capabilities complement our leading offensive cyber capabilities and increase our share in the full-spectrum cyber operations market, which is expected to receive more government funding because of accelerating and evolving cyber threats. Their mission-focused approach and passion for delivering impactful solutions for our nation’s most pressing security challenges aligns seamlessly with Parsons’ business and culture.”

SealingTech was founded in 2012 and focuses on protecting and defending customers’ networks and systems through research, products, engineering and integration services for the Internet of Things, edge combat operations, AI and ML and cloud industries. The company  is a prime contractor on more than 90% of its federal contracts.

“This partnership is the perfect next step in the future of our two companies,” SealingTech CEO Edward Sealing said in a statement. “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. I believe the combination of our capabilities will be a force multiplier for our warfighters and accelerate our business growth and expand our customer base. I am excited about our future together and to become part of the Parsons team.”

Parsons will pay $175 million cash at closing for SealingTech, with an additional $25 million payable in the first quarter of 2025 if certain revenue targets are met during 2024. Parsons estimates SealingTech will generate $110 million of revenue in 2024. SealingTech will remain a wholly owned subsidiary of Parsons and no significant moves to the Centerville headquarters are expected.

The transaction follows Parsons’ acquisition in March of New Jersey-based software company IPKeys Power Partners for $43 million and aligns with its strategy of purchasing companies with revenue growth and adjusted earnings before interest, taxes, depreciation and amortization margins exceeding 10%.