The Parsons Corporation, a construction and engineering company known for building airports and subways, has filed paperwork for an initial public offering that would value the company at around $3 billion, three people familiar with the plan said.
The confidential filing with the U.S. Securities and Exchange Commission sets the stage for employee-owned company to cash in while valuations for defence sector companies are high, people briefed on the talks said. The deal could launch in April or May, one of the people said.
Investment banks, including Goldman Sachs, Morgan Stanley and Bank of America, will likely underwrite the deal, which is expected to raise about $500 million, but the sources said the situation could change before the deal is brought to market.
Representatives for Parsons, Bank of America, Morgan Stanley and Goldman Sachs declined to comment.
While Parsons has been traditionally viewed as a construction company, recent small acquisitions of firms that serve the defence and intelligence industries have bolstered its customer list beyond engineering, the people said, potentially making it more appealing to investors.
In January, Parsons said it bought OGSystems, which provides geospatial intelligence and big data analysis to the Pentagon and the National Geospatial-Intelligence Agency.
Parsons builds airports, tunnels and rail networks in the United States, as well as in the United Arab Emirates, Saudi Arabia and Canada.
U.S. customers include the Department of Defense, the Department of Energy, intelligence agencies and other critical infrastructure owners and operators.
At the end of 2017 Parsons reported revenue of $3 billion and operating income of $156 million, according to the Parsons website, which did not contain recent financial data.
By contrast, competitor Aecom had $18 billion in revenue at the end of fiscal 2017 and $20 billion at the end of fiscal 2018. Jacobs Engineering Group Inc, another competitor, ended its fiscal year in 2017 with $10 billion in revenue, and ended 2018 with $15 billion.
At the end of February, Parsons moved its corporate headquarters to Centreville, Virginia, near other government services contractors in the Washington, D.C. area.
The IPO market got off to a slow start in 2019 on the back of choppy equity markets in December and the U.S. government shutdown that prevented regulators from processing prospective listings.
To date, the IPO market has mainly been made up of biotech companies and blank-check special purpose acquisition firms.
Market participants expect IPO activity to accelerate in the coming months, with high-profile technology companies, including Lyft Inc and Uber Technologies, expected to go public.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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