VSE Corporation (VSEC) has priced its public offerings, selling 3.99M common shares at $188 each to raise about $750M, along with 8M of its 5.750% tangible equity units totaling $400M. Both offerings were upsized from earlier plans. The common stock offering was increased ...

MIRAMAR, Fla.--(BUSINESS WIRE)--VSE Corporation ("VSE†or the "Company†) (NASDAQ: VSEC), a leading provider of aviation aftermarket distribution and repair services, announced today that it has commenced concurrent underwritten public offerings, subject to market and other conditions, of $650 million of its common stock and tangible equity units (the "Units†) with an aggregate stated amount of $350 million, pursuant to an effective shelf registration statement. In addition, VSE intends to grant the under ...

Core Viewpoint - VSE Corporation has announced a definitive agreement to acquire Precision Aviation Group (PAG) for approximately $2.025 billion, which is expected to significantly enhance VSE's aviation aftermarket strategy and profitability over the coming years [2][6]. Deal Rationale: Scale, Footprint, and Capabilities - The acquisition is projected to increase VSE's revenue by about 50% on a pro forma basis and aims for more than 20% consolidated adjusted EBITDA margins in the next few years as integration and synergies are realized [3][6]. - Management anticipates approximately $15 million in annualized synergies from the acquisition, driven by procurement, network optimization, and cross-selling opportunities [6]. - The combination of VSE and PAG is described as complementary, with minimal overlap in capabilities, enhancing VSE's global footprint and improving customer service metrics such as turnaround times and supply chain responsiveness [3][5]. Operational Expansion - Post-acquisition, the combined company will operate 60 locations globally, which includes 47 repair facilities and 11 distribution centers of excellence [4]. - PAG is recognized as a global provider of aviation aftermarket MRO services, distribution, and supply chain solutions across various aviation sectors, including commercial, business, general aviation, rotorcraft, and defense [5]. Financial Details - The deal structure includes $1.75 billion in cash, approximately $275 million in equity to GenNx360, and up to $125 million in earnout, valuing PAG at about 13.5 times projected 2025 adjusted EBITDA [6]. - PAG is expected to contribute approximately $615 million in pro forma revenue for 2025, with adjusted EBITDA margins exceeding 20% [6].

PresentationGood day, and thank you for standing by. Welcome to the VSE Corporation's Conference Call. [Operator Instructions] I would now like to hand the conference over to your first speaker today, Michael Perlman. Please go ahead.Michael PerlmanVice President of Investor Relations & Communications Thank you. Joining me today are John Cuomo, President and CEO; and Adam Cohn, our Chief Financial Officer. Today's call will address the press release issued this morning announcing VSE Corporation has entered ...

Acquisition Details - The stock purchase agreement involves VSE Corporation and several subsidiaries, indicating a strategic acquisition move [2]. - The agreement outlines a cash contribution and rollover securities, suggesting a significant financial commitment from the purchasers [4]. - The equity purchase price and adjustments are detailed, indicating a structured financial arrangement for the acquisition [4]. - The agreement includes provisions for earnout payments, which may incentivize performance post-acquisition [4]. - The total purchase price for the acquisition of the Company Stock is estimated at $275 million, which will be paid in cash and RP Class B Common Stock [22]. - At the closing, the Rollover Purchaser will deliver newly issued shares of class B common stock valued at $275 million to the Seller [22]. - The cash payment to the Seller will be the estimated purchase price minus the Rollover Stock Payment, to be paid in immediately available funds [22]. - The closing of the transaction is scheduled to occur no later than the second business day following the satisfaction of all conditions, but not before April 30, 2026 [26]. - The Rollover Purchaser will acquire all of the Seller's right, title, and interest in the Rollover Securities, which will be contributed to the Cash Purchaser [20]. - The Cash Purchaser will own 100% of the Company Stock immediately following the closing of the transaction [20]. Financial Performance - The company reported a revenue of $5.8 billion for the quarter, reflecting a year-over-year increase of 12% [8]. - User data showed an increase in active users to 150 million, up from 135 million last year, representing an 11% growth [8]. - The company provided guidance for the next quarter, expecting revenue to be between $6.0 billion and $6.5 billion, indicating a potential growth of 10% to 12% [8]. - New product launches included a flagship device that generated $1.2 billion in sales within the first month, contributing significantly to overall revenue [8]. - The company is investing $200 million in research and development for new technologies aimed at enhancing user experience and product performance [8]. - Market expansion efforts have led to a 15% increase in sales in the Asia-Pacific region, with plans to enter two new markets by the end of the fiscal year [8]. - The company completed a strategic acquisition of a smaller tech firm for $500 million, expected to enhance its product offerings and market position [8]. - Customer satisfaction ratings improved to 90%, up from 85% last year, indicating a positive response to recent product updates [8]. - The company reported a decrease in operational costs by 5%, attributed to improved efficiency measures implemented over the past year [8]. - The company plans to increase its marketing budget by 20% to support new product launches and market penetration strategies [8]. Legal and Compliance - Compliance with laws and regulations is emphasized, indicating the importance of legal adherence in the acquisition process [6]. - The agreement includes clauses for confidentiality and access to information, highlighting the sensitivity of the transaction [6]. - The parties involved are required to make reasonable best efforts to fulfill the agreement, indicating a commitment to successful execution [6]. - Seller is duly organized and validly existing under the laws of its state of formation, with all requisite authority to enter into the Agreement [52]. - Seller represents that the Company Stock to be sold is free and clear of any liens, except for those resulting from the Credit Facility [55]. - There are no pending or threatened legal proceedings against Seller that would prevent or materially delay the consummation of the transactions [56]. - No governmental approval is necessary for the consummation of the transactions, except for compliance with the HSR Act, UK NSI Act, and Australian FIRB Legislation [59]. - The Company and its Subsidiaries are duly incorporated and in good standing under the laws of their jurisdictions, with necessary organizational power to conduct their businesses [69]. - The Company has not been a party to any transaction that resulted in relief from any material non-income Tax in the past five years [155]. - The Company has not sought capital gains tax relief under the Australian Tax Act for any asset still owned after Closing [156]. Operational Matters - The document outlines the conduct of business during the transition, ensuring operational continuity [6]. - There are specific representations regarding the company's capitalization, which is crucial for understanding its financial structure [4]. - The Adjustment Escrow Amount will be held in an escrow account to facilitate post-closing adjustments [28]. - Seller must provide a detailed statement of Estimated Working Capital, Estimated Closing Indebtedness, Estimated Transaction Expenses, and Estimated Closing Cash at least three business days before the Closing Date [30]. - The Adjustment Statement must be delivered within 120 days after the Closing Date, detailing Closing Working Capital, Closing Indebtedness, and Closing Transaction Expenses [33]. - If the Net Adjustment Amount is negative, the Purchase Price will be adjusted downward accordingly [40]. - If the Net Adjustment Amount is positive, the Purchase Price will be adjusted upward, with payments made to Seller from the Adjustment Escrow Account [41]. - No payment will be made if the Net Adjustment Amount is zero [42]. - The release of the Adjustment Escrow Amount will occur within five business days after the Net Adjustment Amount is determined [43]. - Recovery from the Adjustment Escrow Account is the exclusive remedy for any Downward Adjustment Amount [44]. Employee and Labor Matters - The Company has provided a list of all employees and workers, including details such as title, date of hire, and employment status [171]. - All employees in the United States are "at will," while those in the United Kingdom can be terminated with no more than three months' notice [171]. - The Company and its Subsidiaries have been in compliance with all applicable employment laws, including those regarding discrimination and wages [174]. - Since the Lookback Date, there have been no unfair labor practice charges or investigations against the Company [175]. - There are no labor strikes or work stoppages currently in effect or threatened against the Company [176]. - All current and former employees in the United States have been legally authorized to work [177]. - The Company has maintained necessary employment verification paperwork under the Immigration Reform and Control Act of 1986 [177]. - The Company has not implemented any mass layoffs or redundancies since the Lookback Date [180]. - The Company has complied with all applicable data protection laws regarding personal data of employees [181]. - The Company has not been a party to any union contracts or collective bargaining agreements in the last three years [179].

VSE Corporation Conference Call Summary Company Overview - **Company**: VSE Corporation - **Acquisition Target**: Precision Aviation Group (PAG) - **Transaction Value**: Approximately $2.025 billion, consisting of $1.75 billion in cash and $275 million in equity consideration [17][18] Key Points from the Conference Call Acquisition Details - VSE Corporation has signed a definitive agreement to acquire PAG, which is expected to increase VSE's revenue by about 50% on a pro forma basis [4][6] - The acquisition aims to create a higher-margin aviation aftermarket platform, with expectations of over 20% consolidated adjusted EBITDA margins in the coming years [4][11] - The deal is anticipated to be immediately accretive to VSE's adjusted EBITDA margin [18] Strategic Rationale - The acquisition broadens VSE's global footprint, enhancing customer proximity and supply chain responsiveness [5] - It expands VSE's parts, repair, and proprietary capabilities, creating one of the most diverse aftermarket capability sets in the market [5][10] - PAG supports over 10,000 active customers across various aviation sectors, improving resilience through market cycles [5][9] Financial Performance - VSE's aviation segment revenue has grown approximately 30% CAGR from $225 million in 2019 to about $1.1 billion in 2025 [7] - Consolidated adjusted EBITDA margins expanded over 400 basis points to approximately 16.3% in 2025 [7] - Preliminary fourth quarter and full year 2025 revenue is expected to be in the range of $290-$304 million and $1.101-$1.115 billion, respectively [19] Integration and Synergies - VSE and PAG are expected to realize over $15 million in annualized synergies through operational and corporate support integration [16] - The integration strategy will focus on optimizing consolidated offerings, cross-selling, and improving operational efficiencies [16][28] - The integration is planned to kick off in January 2027, allowing PAG to continue its operational excellence until then [49] Market Position and Growth Opportunities - The combined company will employ approximately 2,600 people across 60 locations in eight countries [10] - The end market exposure post-acquisition is expected to be approximately 50% business and general aviation, 45% commercial, and 5% military [11] - VSE aims to leverage PAG's capabilities to enhance its proprietary solutions, which currently represent under 10% of PAG's revenue [39][57] Future Outlook - VSE anticipates continued growth in proprietary solutions and plans to partner with OEMs to address supply chain constraints [39] - The focus will be on smaller tuck-in acquisitions to enhance capabilities rather than large transformational deals [46] - The integration plan will be shared in detail during an investor day scheduled for early January [42] Additional Insights - PAG operates 29 locations worldwide and completes over 175,000 repairs annually, generating approximately $615 million in adjusted revenue for the full year ended December 31, 2025 [9] - The acquisition is seen as a transformational step for VSE, enhancing its capabilities and market position as a critical partner to aviation operators globally [20][60]

Acquisition Announcement VSE to Acquire Precision Aviation Group vsecorp.com January 29, 2026 vsecorp.com Safe Harbor Statement Forward-Looking Statements This presentation contains statements that, to the extent they are not recitations of historical fact, constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Exchange Act. All such statements are intended to be covered by the safe harbor provisions ...

Core Insights - The aerospace and defense industry is characterized by a long-term stable growth trajectory, with higher growth prospects in commercial aerospace and modest growth in defense sectors [1]. Group 1 - The Aerospace Forum is highlighted as a leading investment research service focused on aerospace, defense, and airline sectors, providing access to data analytics [1]. - The analyst, Dhierin-Perkash Bechai, has a background in aerospace engineering and aims to identify investment opportunities within the industry [1]. - The analysis provided by the forum is data-driven, offering context to industry developments and their potential impact on investment strategies [1].

Core Viewpoint - China has imposed sanctions on 20 US defense-related companies and 10 senior executives in response to a recent US arms sale package to Taiwan valued at $11.1 billion, indicating a firm stance on national sovereignty and territorial integrity [1][4]. Group 1: Sanctions Details - The Chinese Foreign Ministry announced actions against those involved in arming Taiwan, emphasizing strict repercussions for any provocations regarding Taiwan [2][3]. - The sanctions include freezing all movable and immovable properties and assets of the listed companies within China, and barring Chinese organizations and individuals from engaging in transactions or cooperation with these entities [4][5]. Group 2: Affected Companies and Executives - The 20 US companies sanctioned include Northrop Grumman Systems Corporation, L3Harris Maritime Services, Boeing in St Louis, and others, highlighting a significant impact on the US defense sector [3][4]. - The 10 senior executives targeted by the sanctions include leaders from companies such as Anduril Industries, L3Harris Technologies, and Advanced Acoustic Concepts, indicating a direct impact on key personnel in the defense industry [4]. Group 3: Context of US Arms Sale - The US arms sale package to Taiwan, announced on December 18, includes significant military equipment such as HIMARS rocket systems, howitzers, and Javelin anti-tank missiles, marking the largest arms package under the Trump administration [6].

Core Viewpoint - The Chinese government has announced countermeasures against U.S. military-related companies and senior executives in response to the U.S. decision to sell weapons to Taiwan, which China views as a violation of its sovereignty and territorial integrity [1][2]. Group 1: Countermeasures Against Companies - The Chinese government will freeze assets and prohibit transactions with 20 U.S. military-related companies, including Northrop Grumman Systems Corporation, L3Harris Maritime Services, and Boeing in St. Louis [1][4]. - The list of companies also includes Gibbs & Cox, Advanced Acoustic Concepts, VSE Corporation, and several others, all of which are specified in the countermeasure list [4][5]. Group 2: Countermeasures Against Executives - The countermeasures extend to 10 senior executives from the listed companies, including Palmer Luckey (founder of Anduril), John Cantillon (L3Harris), and Michael Carnovale (Advanced Acoustic Concepts) [2][5]. - These executives will have their assets frozen and will be prohibited from entering China, including Hong Kong and Macau [2][5]. Group 3: Implementation Date - The countermeasures will take effect on December 26, 2025 [3].