KippsDeSanto & Co. Advises Braxton Science & Technology Group, LLC on its sale to Parsons Corporation

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KippsDeSanto & Co. Advises Braxton Science & Technology Group, LLC on its sale to Parsons Corporation

KippsDeSanto & Co. is pleased to announce the sale of its client, Braxton Science & Technology Group, LLC (“Braxton” or the “Company”) to Parsons Corporation (NYSE: PSN).

Headquartered in Colorado Springs, CO, Braxton is a leading provider of command and control, data transport, and cybersecurity solutions that unify spacecraft ground control operations across the Department of Defense (“DoD”) and Intelligence Community (“IC”). Braxton leverages its broad, differentiated portfolio of integrated and cross-functional products and services to deliver comprehensive satellite system solutions, including ground system automation, communication, and flight dynamics. These advanced solutions provide Braxton’s customers with mission-critical support for all spacecraft ground control and spacecraft integration mission requirements. The Company has supported more than 100 spacecraft missions across all seven continents, developing significant space domain expertise and a robust track record providing solutions to a diverse set of customers across the DoD and IC.

The transaction complements Parsons Corporation’s space portfolio increases its product offerings in high-growth markets, and adds critical intellectual property that expands its capabilities for the U.S. Air Force, Space Force, and Space and Missile Command.

We believe this investment demonstrates several key trends in the current defense environment:

  • Space continues to be a highly coveted growth and M&A area given its importance to National Security and increasing budgetary trends
  • Significant demand for advanced, technology-centric, engineering solutions supported by Company-owned intellectual property
  • Strong focus on companies that have high barriers to entry, embedded positions within sought-after and hard-to-reach space and IC customers, and strong competitive differentiators within the rapidly evolving space system ecosystem (i.e., LEO communications constellations, small satellites, and space cyber resiliency)
  • Strategic buyers continue to seek acquisitions that unlock value and accelerate growth, particularly for assets that demonstrate substantial revenue visibility, protected intellectual property, and seasoned management teams

 About KippsDeSanto & Co.

KippsDeSanto & Co. is an investment banking firm focused on serving growth-oriented Aerospace / Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience. We help market leaders realize their full strategic value. Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight, and broad industry relationships. There’s no substitute for experience.  For more information, visit www.kippsdesanto.com.

Investment Banking products and services are offered through KippsDeSanto & Co., a non-bank subsidiary of Capital One, N.A., a wholly-owned subsidiary of Capital One Financial Corporation, and a member of FINRA and SIPC. Products and services are Not FDIC insured, Not Bank Guaranteed, May Lose Value, Not a Deposit, and Not Insured by Any Federal Government Agency.

Press Release

Parsons to Acquire Braxton Science & Technology Group

Acquisition enhances Space and Cyber portfolio; Accretive to top and bottom line growth

CENTREVILLE, VA (Oct. 27, 2020) – Parsons Corporation (NYSE:PSN) announced today that it has entered into a definitive agreement to acquire Braxton Science & Technology Group, LLC (“Braxton”) and its subsidiaries for approximately $300 million in cash. The acquisition increases Parsons’ federal solutions, product and capabilities in the space and cyber markets.

Braxton’s broad portfolio of commercial off-the-shelf (COTS) products provide mission critical solutions including spacecraft ground control and spacecraft integration. Braxton has over 50 differentiated product offerings focused on space missions that are comprised of software and hardware products combined with advanced engineering services. Braxton’s industry leading product portfolio is built on a technology base of artificial intelligence leveraging machine learning, deep learning, and data analytics, and integrates advanced cybersecurity tool sets. The group will be integrated into Parsons’ space and geospatial solutions market, adding more than 370 employees, 80 percent of whom hold security clearances.

“The addition of Braxton complements our space portfolio, increases our product offerings in high-growth markets, and adds critical intellectual property that complements and expands our capabilities for the U.S. Air Force, Space Force, and Space and Missile Command,” said Chuck Harrington, Parsons’ chairman and chief executive officer. “We look forward to welcoming Braxton’s employees into the Parsons’ family, driving synergistic solutions that leverage our expanded set of space solutions, growing our technology and transactional revenues, and furthering our customer’s critical missions including joint all domain operations.”

Headquartered in Colorado Springs, Co., Braxton operates at the forefront of satellite operations, ground system automation, flight dynamics, and spacecraft and antenna simulation for the U.S. Department of Defense and Intelligence Community. These capabilities position Parsons to capitalize on the quickly evolving space missions of its national security space customers and address rapid market growth driven by proliferated low earth orbit (LEO) constellations, small satellite expansion, and space cyber resiliency. Braxton has specific domain expertise with the U.S. Air Force’s Enterprise Ground Services (EGS) effort: a next generation architecture that will unify spacecraft ground control operations across multiple major government agencies.

The transaction is consistent with Parsons’ strategy of acquiring high-growth, defense, and intelligence technology companies with software and hardware intellectual property that enhance its technology and transactional revenue growth and margin profile.

“The combination of Braxton’s leading defense capabilities, and decades of trusted customer relationships, combined with Parsons’ global scale, cross-industry experience, and disruptive mindset creates a leading space technology provider,” said Ken O’Neil, President of Braxton. “We’re excited to join an organization known for their entrepreneurial spirit, agility, culture of innovation and inclusivity, and successful track record of mergers, acquisitions, and integrations. Parsons is a large company with the operational agility of a smaller organization, which attracted us to them and gives us confidence in our future success together.”

The transaction is valued at approximately $258 million, including the net present value of a $42 million transaction-related tax benefit, or approximately 11x Braxton’s estimated 2021 adjusted EBITDA before considering any revenue or cost synergies. For 2021, Braxton is expected to generate revenue of approximately $133 million. The transaction is expected to be accretive to Parsons’ 2021 adjusted earnings per share and close in Q4 2020, subject to customary closing conditions. Parsons was advised by Goldman Sachs & Co LLC and Latham & Watkins LLP. Braxton was advised by KippsDeSanto & Co and Sparks Wilson, P.C.

About Parsons:

Parsons (NYSE: PSN) is a leading disruptive technology provider in the global defense, intelligence, and critical infrastructure markets, with capabilities across cybersecurity, missile defense, space, connected infrastructure, and smart cities. Please visit Parsons.com and follow us on LinkedIn and Facebook to learn how we’re making an impact.

Forward-Looking Statements

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