CHANTILLY, Va. – Parsons Corporation (NYSE:), a technology provider in the defense and infrastructure sectors, announced Monday that it has agreed to purchase BCC Engineering, LLC, a prominent transportation engineering firm based in Florida. The all-cash transaction is valued at $230 million.
The acquisition is aimed at strengthening Parsons’ infrastructure capabilities in the Southeastern United States, a region that is poised to benefit from the Infrastructure Investment and Jobs Act, which has allocated around $100 billion for highway projects through 2026.
BCC Engineering, currently a part of Trivest Partners’ portfolio, offers a range of services including planning, design, and management for transportation, civil, and structural projects. With a presence in Florida, Georgia, Texas, South Carolina, and Puerto Rico, BCC has been involved in over 100 major projects, notably for the Florida Department of Transportation. The firm is also recognized for its workplace environment and has been listed as a Top 500 design firm by Engineering News Record (ENR).
Parsons’ chair, president, and CEO, Carey Smith, expressed enthusiasm for the acquisition, highlighting the potential for enhanced service offerings and impact on infrastructure across North America. Jose Muñoz, president & CEO of BCC, echoed this sentiment, pointing to the alignment of visions for the future of infrastructure.
The financial aspects of the deal include a net transaction value of $221 million, accounting for $9 million in transaction-related tax benefits, and an expected EBITDA multiple of 13.0x for BCC’s estimated 2025 earnings. Parsons anticipates that BCC will contribute approximately $110 million in gross revenue for 2025 and enhance Parsons’ revenue growth and EBITDA margins.
The transaction, which is subject to customary closing conditions, is anticipated to be finalized within the next 30 days. BofA Securities and Jenner & Block provided advisory services to Parsons, while Akerman advised BCC.
This acquisition marks a strategic expansion for Parsons as it continues to position itself as a leader in the infrastructure space, particularly in the context of significant federal investment in the sector.
The information regarding this acquisition is based on a press release statement from Parsons Corporation.
In other recent news, Parsons Corporation, a technology provider in national security and infrastructure markets, made significant strides in acquiring new contracts and increasing its revenue. The company secured a $225 million contract with the United States Army Corps of Engineers (USACE) for environmental remediation projects, along with two Middle East transport contracts totaling $25 million. Parsons also landed a spot on a $4 billion contract supporting the U.S. Defense Threat Reduction Agency’s counter-WMD efforts and was selected to manage a PFAS treatment project at the Burlington (NYSE:) Air National Guard Base.
In addition, Parsons was named as the design subcontractor for Tutor Perini (NYSE:) Corporation’s $1.66 billion Honolulu rail project. The company also reported record revenue of $1.7 billion and adjusted EBITDA of $150 million. Analyst firms KeyBanc and Benchmark revised their price targets for Parsons to $99 and $101 respectively, indicating increased estimates for future earnings and growth potential.
These recent developments are part of Parsons’ engagement with the Infrastructure Investment & Jobs Act, which is expected to provide more stable long-term support for its projects. The company’s backlog currently stands at $8.8 billion, with $13 billion in recent contract wins.
InvestingPro Insights
Parsons Corporation’s acquisition of BCC Engineering aligns well with its growth strategy and financial performance. According to InvestingPro data, Parsons has shown strong revenue growth, with a 28.35% increase in the last twelve months as of Q2 2024, reaching $6.12 billion. This acquisition is likely to further boost these figures, especially considering BCC’s expected contribution of $110 million in gross revenue for 2025.
The company’s financial health appears robust, with InvestingPro Tips indicating that Parsons’ liquid assets exceed short-term obligations and it operates with a moderate level of debt. This financial stability positions the company well for integrating BCC and potentially pursuing further strategic acquisitions.
Investors seem optimistic about Parsons’ prospects, as reflected in the stock’s performance. InvestingPro data shows a remarkable 89.6% price total return over the past year, and the stock is trading near its 52-week high. This positive sentiment aligns with the company’s expansion strategy and the potential benefits from increased infrastructure spending.
It’s worth noting that while Parsons is trading at a high earnings multiple, with a P/E ratio of 210.25, analysts have revised their earnings upwards for the upcoming period, suggesting confidence in the company’s future performance. The acquisition of BCC Engineering could further enhance Parsons’ earnings potential, particularly in the lucrative Southeastern U.S. market.
For investors seeking more comprehensive analysis, InvestingPro offers 16 additional tips for Parsons Corporation, providing a deeper understanding of the company’s financial position and market outlook.
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