XML 24 R11.htm IDEA: XBRL DOCUMENT
v3.21.2

Acquisitions | 9 Months Ended
--- | ---
Sep. 30, 2021
Business Combinations [Abstract] |
Acquisitions |
4. | Acquisitions
BlackHorse Solutions, Inc. On July 6, 2021, the Company acquired a 100% ownership interest in BlackHorse Solutions, Inc (“BlackHorse”), a privately-owned company, for $205.0 million in cash. BlackHorse expands Parsons’ capabilities and products in next-generation military, intelligence, and space operations, specifically in cyber electronic warfare and information dominance. The acquisition was entirely funded by cash on-hand. In connection with this acquisition, the Company recognized $3.0 million of acquisition related “Selling, general and administrative expense” in the consolidated statements of income for the three months ended September 30, 2021, including legal fees, consulting fees, and other miscellaneous direct expenses associated with the acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed based on the purchase price allocation as of the date of acquisition (in thousands):
|  | Amount |
Cash and cash equivalents |  | $ | 15,428 |
Accounts receivable |  |  | 3,351 |
Contract assets |  |  | 5,979 |
Prepaid expenses and other current assets |  |  | 977 |
Property and equipment |  |  | 2,278 |
Right of use assets, operating leases |  |  | 6,157 |
Goodwill |  |  | 142,948 |
Intangible assets |  |  | 65,000 |
Accounts payable |  |  | (2,326 | )
Accrued expenses and other current liabilities |  |  | (17,197 | )
Contract liabilities |  |  | (320 | )
Short-term lease liabilities, operating leases |  |  | (1,011 | )
Long-term lease liabilities, operating leases |  |  | (5,146 | )
Deferred tax liabilities |  |  | (11,091 | )
Net assets acquired |  | $ | 205,027 |
Of the total purchase price, the following values were assigned to intangible assets (in thousands, except for years):
|  | Gross Carrying Amount |  |  | Amortization Period
|  |  |  |  |  | (in years)
Customer relationships |  | $ | 40,000 |  |  | 16
Backlog |  |  | 22,000 |  |  | 3
Trade name |  |  | 1,000 |  |  | 2
Developed technologies |  |  | 1,000 |  |  | 3
Non-compete agreements |  |  | 1,000 |  |  | 3
Amortization expense of $2.6 million related to these intangible assets was recorded for the three months ended September 30, 2021. The entire value of goodwill was assigned to the Federal Solutions reporting unit and represents synergies expected to be realized from this business combination. Goodwill of $10.6 million is deductible for tax purposes. The amount of revenue generated by BlackHorse and included within consolidated revenues is $16.7 million for the three months ended September 30, 2021. The Company has determined that the presentation of net income from the date of acquisition is impracticable due to the integration of general corporate functions upon acquisition. The Company is still in the process of finalizing its valuation of the net assets acquired. Supplemental Pro Forma Information (Unaudited) Supplemental information of unaudited pro forma operating results assuming the BlackHorse acquisition had been consummated as of the beginning of fiscal year 2020 (in thousands) is as follows:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, 2021 |  |  | September 30, 2020 |  |  | September 30, 2021 |  |  | September 30, 2020 |
Pro forma Revenue |  | $ | 957,498 |  |  | $ | 1,017,325 |  |  | $ | 2,748,559 |  |  | $ | 2,988,153 |
Pro forma Net Income including noncontrolling interests |  |  | 31,070 |  |  |  | 45,195 |  |  | $ | 56,694 |  |  | $ | 82,921 |
Echo Ridge LLC On July 30, 2021, the Company acquired a 100% ownership interest in Echo Ridge LLC (“Echo Ridge”), a privately-owned company, for $9.0 million in cash. Echo Ridge adds position, navigation, and timing devices; modeling, simulation, test, and measurement tools; and deployable software defined radio products and signal processing services to Parsons’ space portfolio. The acquisition was entirely funded by cash on-hand. In connection with this acquisition, the Company recognized $0.3 million of acquisition related “Selling, general and administrative expense” in the consolidated statements of income for the three months ended September 30, 2021, including legal fees, consulting fees, and other miscellaneous direct expenses associated with the acquisition. The Company allocated the purchase price to the appropriate classes of tangible assets and liabilities and assigned the excess of $7.2 million to goodwill. The entire value of goodwill was assigned to the Federal Solutions reporting unit and represents synergies expected to be realized from this business combination. Goodwill in its entirety is deductible for tax purposes. Braxton Science & Technology Group On November 19, 2020, the Company acquired a 100% ownership interest in Braxton Science & Technology Group (“Braxton”), a privately-owned company, for $309.5 million in cash. 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. The acquisition was entirely funded by cash on hand. In connection with this acquisition, the Company recognized $0.6 million of acquisition related “Selling, general and administrative expense” in the consolidated statements of income for the nine months ended September 30, 2021, including legal fees, consulting fees, and other miscellaneous direct expenses associated with the acquisition. Braxton allows 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 constellations, small satellite expansion, and space cyber resiliency. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed based on the purchase price allocation as of the date of acquisition (in thousands):
|  | Amount |
Cash and cash equivalents |  | $ | 7,006 |
Accounts receivable |  |  | 18,163 |
Contract assets |  |  | 8,350 |
Prepaid expenses and other current assets |  |  | 3,036 |
Property and equipment |  |  | 5,114 |
Right of use assets, operating leases |  |  | 10,788 |
Goodwill |  |  | 212,185 |
Intangible assets |  |  | 74,950 |
Accounts payable |  |  | (7,464 | )
Accrued expenses and other current liabilities |  |  | (9,845 | )
Contract liabilities |  |  | (300 | )
Short-term lease liabilities, operating leases |  |  | (1,915 | )
Long-term lease liabilities, operating leases |  |  | (8,873 | )
Deferred tax liabilities |  |  | (1,694 | )
Net assets acquired |  | $ | 309,501 |
Of the total purchase price, the following values were assigned to intangible assets (in thousands, except for years):
|  | Gross Carrying Amount |  |  | Amortization Period
|  |  |  |  |  | (in years)
Customer relationships |  | $ | 34,100 |  |  | 12
Backlog |  |  | 38,200 |  |  | 3
Developed technologies |  |  | 2,000 |  |  | 6
Non-compete agreements |  |  | 650 |  |  | 3
Amortization expense of $4.0 million and $12.1 million related to these intangible assets was recorded for the three and nine months ended September 30, 2021, respectively. The entire value of goodwill was assigned to the Federal Solutions reporting unit and represents synergies expected to be realized from this business combination. Goodwill of $196.3 million is deductible for tax purposes. The amount of revenue generated by Braxton and included within consolidated revenues is $34.0 million and $94.3 million for the three and nine months ended September 30, 2021, respectively. The Company has determined that the presentation of net income from the date of acquisition is impracticable due to the integration of general corporate functions upon acquisition. Supplemental Pro Forma Information (Unaudited) Supplemental information of unaudited pro forma operating results assuming the Braxton acquisition had been consummated as of the beginning of fiscal year 2019 (in thousands) is as follows:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, 2021 |  |  | September 30, 2020 |  |  | September 30, 2021 |  |  | September 30, 2020 |
Pro forma Revenue |  | $ | 956,050 |  |  | $ | 1,046,002 |  |  | $ | 2,710,103 |  |  | $ | 3,050,708 |
Pro forma Net Income including noncontrolling interests |  |  | 27,463 |  |  |  | 48,072 |  |  | $ | 55,391 |  |  | $ | 93,672 |

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration