Parsons last month picked up Polaris Alpha, a significant step in its effort to accelerate the growth of its federal business.
The federal unit is led by Carey Smith, who took over in late 2016 after heading Honeywell's defense and space business. Last week, Smith told Inside Defense in an interview at Parsons' federal headquarters in Centreville, VA, that she immediately saw several key growth areas for the unit. Many of these areas, she said, will be bolstered by the addition of Polaris Alpha.
"Taking a look at the business, it appeared to me there was quite a bit of white space opportunities, as well as opportunity to grow within our core markets," Smith, who also previously served as an executive at Lockheed Martin, said of her early assessment.
She said she immediately focused on faster growth for the company's cybersecurity and intelligence work as well as its engineering and technical services efforts, which are focused on the Missile Defense Agency and NASA.
Smith said she then sought to identify adjacent markets and has found four for Parsons: critical infrastructure protection, space, healthcare and energy.
"One of the white spaces is really the critical infrastructure protection market," Smith said. "It takes three components to be able to participate in that market, which is you have to be an infrastructure company plus a cybersecurity company plus a physical security company. And that's really where we differentiate."
Smith said she began examining acquisitions to help the federal business grow. Last year, Parsons acquired Williams Electric, which specializes in industrial control systems.
Polaris Alpha, she said, caught her attention as she was seeking a business that would fill or expand key areas.
"We do work in data analytics, we do work in artificial intelligence, machine learning, but not to the extent that Polaris does, and we saw that as a significant enhancement," she said. "We can also bid larger jobs now because we have more size and scale."
The acquisition considerably increases the federal unit, making it more than half of the total company, Smith said. Parsons reported $3 billion in sales in 2017.
Smith said she expects the integration process to take 12 to 18 months.
Peter Cannito, who led Polaris Alpha, told Inside Defense in the same interview last week that his company was seeking a buyer who "shared our vision of being non traditional."
Smith said Parsons would likely continue to acquire as it pursues growth.
"It has to be a company that is in growing, enduring markets and that leads with technology and has technology differentiation in those spaces," she said. "Where we see companies that fit that, that can fill some gaps or further accelerate our strategy, we will be open to acquire."