One of the top trends across the federal government and U.S. military over the past few years involves digital transformation – the adoption of next-generation digital solutions and technologies capable of replacing or improving previously inefficient processes bogging down organizational operations.
Embracing new solutions – from advanced artificial intelligence (AI) to Big Data and data analytics technologies, cloud computing, internet of things (IoT), and others – and the advanced capabilities that they enable has been a top priority for federal and state governments as they transition from slow, ineffective, and archaic legacy systems and processes.
As government systems, applications, and platforms become digital, risks have arisen alongside the process improvements and increases in operational efficiency. The movement to digital services has left government agencies and organizations more vulnerable than ever before to an increasingly prolific and sophisticated cyber threat – including nation-state hackers and other well-funded, well-equipped, and capable cyber adversaries.
Both the embrace of new solutions and digital transformation and the subsequent need to defend government networks have created a massive opportunity for companies to help government entities navigate the implementation of new technologies and protect their networks. One such company that has an impressive track record of supporting the government and military overcome its digital challenges is Parsons Corporation. This track record has positioned the company as a partner of choice across the defense and intelligence communities, resulting in massive growth for the company – culminating in a successful IPO in 2019.
We recently sat down with Chuck Harrington, the company’s chief executive officer, to talk about the government trends driving growth at Parsons and its recent IPO, which was recognized with a 2020 Corporate Growth Award by the National Capital Chapter of ACG.
Here is what Chuck had to say:
Corporate Growth, Capital Style (CGCS): The Parsons IPO was named the Deal of the Year (Over $250M) at this year’s Corporate Growth Awards. Why was an IPO the correct move for Parsons in 2019?
Chuck Harrington: Parsons had just completed the acquisitions of Polaris Alpha and OG Systems for $475 million and $300 million, respectively. The company has methodically transformed itself to operate at the nexus of critical infrastructure and federal solutions.
The proceeds from the IPO enabled Parsons to de-lever our balance sheet and provide additional financial flexibility to continue making strategic, accretive acquisitions and invest in, develop, and implement disruptive technologies that enhance our growth and further support our customer’s missions.
CGCS: The IPO raised approximately $462.9 million. Was this in line with internal expectations? Analyst expectations? What do you attribute to the success?
Chuck Harrington: Yes, this was in-line with internal expectations and was one of the more successful IPOs in 2019. We attribute our success to Parsons being a well-positioned company with a long track record of success that invests in technology and product revenue streams to expand margins and drive top-line growth.
Additionally, the company’s management team has delivered strong results and was the first IPO of a government services firm since 2010.
CGCS: What will the IPO enable Parsons to do moving forward? How does it position the company for future growth?
Chuck Harrington: The IPO primarily provided us with additional financial flexibility to invest in products and technologies and pursue acquisitions that filled capability gaps.
Post IPO, we acquired two companies with strong product and technology portfolios – QRC® Technologies and Braxton Science and Technology Group – that have provided access to new customers and capabilities while enhancing our revenue growth and margins.
CGCS: Parsons works extensively with the government – specifically the defense, intelligence, and critical infrastructure markets. What are some of the trends driving technology investment within these sectors of the government? What new capabilities and technologies are they looking to embrace?
Chuck Harrington: As a company, we’re focusing our investments in four key technologies in high demand by our customers: artificial intelligence and machine learning; cloud computing; autonomous systems; and the Internet of Things (IoT).
These technologies are critical to solving our customer’s most challenging problems, like cybersecurity threats, high-speed data processing to drive near real-time actionable intelligence, counter-hypersonics, space launch and integration, and developing smart cities to improve society’s safety, mobility, and quality-of-life.
As a company, we’re focusing our investments in four key technologies in high demand by our customers: artificial intelligence and machine learning; cloud computing; autonomous systems; and the Internet of Things (IoT).Chuck Harrington
CGCS: A lot is going on right now, including a global pandemic, an election, and other unique events and issues our government is dealing with. How are these issues impacting government digital transformation and technology initiatives? What opportunities are they creating for Parsons now and into the future?
Chuck Harrington: Global tensions with near-peer threats remain high. Cyberattacks increased during the pandemic as evidenced by attacks on the departments of Treasury, Commerce, and other agencies. These threats are never-ending and evolving as technology and adversary priorities change. The U.S. government relies on contractors like Parsons to fill technology gaps and provide mission-critical solutions comprised of software, hardware, and associated services.
Our customers need technology-enabled solutions to perform tasks more effectively and efficiently.
Key opportunity areas include protecting critical infrastructure on the federal, state, and local levels; supply chain assurance; protecting space assets given the increasing density of earth-launched assets in space combined with its potential to be the next warfighting domain; and investments in smart infrastructure to move goods and services through cities more quickly and efficiently.
For a full list of 2020 Corporate Growth Award winners, click HERE. For additional information about Parsons, click HERE to visit their Website.