Colorado Springs-based defense contractor Polaris Alpha will be acquired May 31 by California-based engineering and construction giant Parsons in a deal designed to accelerate Polaris Alpha's growth in cybersecurity, battlefield management, small satellites and other advanced technologies.
The transaction will give Parsons nearly 800 employees in Colorado, including 350 Polaris Alpha employees in Colorado Springs and 100 in the Denver area, that will be merged into Parsons' federal contracting unit during the next 12 to 18 months, said Carey Smith, who heads the unit. Terms of the deal, announced to employees early Monday, were not disclosed since both companies are privately held. The deal is scheduled for completion May 31 after it clears a mandatory waiting period under federal antitrust laws, she said.
Smith said she began looking for acquisitions about 10 months ago, shortly after joining Parsons, and identified Polaris Alpha as "the perfect mix of capabilities." She approached Arlington Capital Partners, which had acquired Colorado Springs-based Intelligent Software Solutions and merged it with two other companies in November 2016 to form Polaris Alpha, about a sale.
While Parsons may reduce costs by eliminating duplication of some administrative operations, she said those "synergies" haven't yet been identified and the deal is designed to expand Polaris Alpha's operations by combining the capabilities of both companies.
"Parsons and Polaris Alpha customers, many of which are common to both companies, will benefit from existing complimentary technologies and increased scale, enabling end-to-end solutions under our shared vision of rapid prototyping and agile development," Smith said Monday in a news release. "Our plan for integration is simple - combining Parsons' and Polaris Alpha's capabilities and cultures for the benefit of our customers and employees."
Jay Jesse, Polaris Alpha's president and a co-founder of Intelligent Software Solutions, said the acquisition will help accelerate expansion plans announced last month that will add 455 employees during the next eight years and add 100,000 square feet of office space the company will build or lease in Denver and Colorado Springs.
That expansion was planned in two phases with the addition during the next year or two of 150 employees to its Denver operation and construction of a 20,000-square-foot office in the Denver area, followed by adding 300 employees and another 60,000 square feet of office space to its Colorado Springs operation over the next six years.
"I am really excited about this. I believe the market is ready for a player that is agile with some scale," Jesse said.
Employee-owned Parsons employs 320 in Colorado and more than 14,000 worldwide to generate more than $3 billion in federal contracting, infrastructure engineering and design and an operation in the Middle East and Africa.
The company was started in Los Angeles by Ralph M. Parsons in 1944 and did early work in the oil industry before it helped to build the Point Magu missile facility in 1948. The company is best known for building Minuteman missile silos across the nation, the Metro light rail system in Washington, D.C., and airport, bridge and highway projects worldwide, including the Southeast Corridor Transportation Expansion (T-REX) project in the Denver area.
"The acquisition of Polaris Alpha is the latest transformative move for Parsons that takes our technology solutions strategy to a new level with customers needing advanced solutions to rapidly-evolving threats," Chuck Harrington, Parsons' chairman and CEO, said in the release.
"With the integration of Polaris Alpha into Parsons, we enhance our proven artificial intelligence and data analytics expertise with new technologies and solutions, the demand for which is growing exponentially."
Much of Parsons' work in the Colorado Springs area has been as the systems engineering and technical assistance contractor to the Missile Defense Agency, which operates its Missile Defense Integration and Operations Center at Schriever Air Force Base east of Colorado Springs for research and development, system-level tests and evaluation and operational and training support warfighting commands.
Smith said Parsons targeted Polaris Alpha for acquisition because of its expertise in cybersecurity, systems engineering, battle management, command and control, small satellite integration and other advanced technologies that can be incorporated into Parsons' work with the Missile Defense Agency.
Intelligent Software Solutions was started in Colorado Springs in 1997 by Jesse and three co-founders - all but one of whom worked with GTE Government Systems. The company grew rapidly to make the Inc. magazine 5000 fastest-growing companies list nine times in 10 years, in 2004-13.
After merging in 2016 with Maryland-based Proteus Technologies and Virginia-based EOIR Technologies to form Polaris Alpha, the company has made two acquisitions to boost its workforce by 200 people to more than 1,300 employees with headquarters in the Springs and Fredericksburg, Va., with additional offices in Alabama, Florida, Maryland, New Jersey, New York, Ohio, Virginia and the United Kingdom.