VSE Corporation Completes Kellstrom Aerospace Acquisition

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Acquisition Expands VSE Aviation’s Presence in the Growing Commercial Engine Aftermarket

MIRAMAR, Fla.--(BUSINESS WIRE)-- VSE Corporation (“VSE” or the “Company”) (NASDAQ: VSEC), a leading provider of aftermarket distribution and repair services, announced today that the Company has closed its previously announced acquisition of Kellstrom Aerospace Group, Inc. (“Kellstrom”), a portfolio company of AE Industrial Partners, LP and a diversified global distributor and service provider supporting the commercial aerospace engine aftermarket.

MANAGEMENT COMMENTARY

“Today represents the next step in the VSE Aviation product and services growth strategy, with a clear opportunity to profitably grow our business and better serve our global aerospace aftermarket customers,” said John Cuomo, President and CEO of VSE Corporation. “The acquisition of Kellstrom Aerospace strengthens our OEM-centric value proposition and demonstrates our commitment to growing our distribution and MRO capabilities in the growing commercial aerospace aftermarket. Kellstrom’s successful track record of supporting a diverse group of global OEM partners through its portfolio of proprietary engine-focused products and repair services, along with its technical advisory capabilities, is highly complementary to VSE Aviation’s business. We are confident that the combination of our respective businesses will drive significant value to our customers and supplier partners.”

“We are excited to welcome the talented team of Kellstrom employees to the VSE Aviation family,” stated Ben Thomas, President of VSE Aviation. “By combining the teams, products, and service offerings of VSE Aviation and Kellstrom, we will provide more comprehensive solutions to benefit our customers and suppliers in a meaningful way. Our strong cultural alignment, complementary capabilities and shared service focus on the aviation aftermarket will allow us to capitalize on the significant growth opportunities ahead.”

AGREEMENT TERMS

VSE acquired Kellstrom for approximately $185 million in cash and 172,414 common shares of the Company, subject to working capital adjustments. The cash purchase price for the acquisition was funded using proceeds from the October public offering of common stock and borrowings under the Company’s existing credit facility.

ADVISORS

Jones Day served as legal counsel and Jefferies, LLC acted as exclusive financial advisor to VSE Corporation with respect to the Kellstrom acquisition. Kirkland & Ellis LLP served as legal counsel and Perella Weinberg Partners served as exclusive financial advisor to Kellstrom.

ABOUT VSE CORPORATION

VSE is a leading provider of aftermarket distribution and repair services. Operating through its two key segments, VSE significantly enhances the productivity and longevity of its customers' high-value, business-critical assets. The Aviation segment is a leading provider of aftermarket parts distribution and maintenance, repair, and overhaul (MRO) services for components and engine accessories to commercial, business, and general aviation operators. The Fleet segment specializes in part distribution, engineering solutions, and supply chain management services catered to the medium and heavy-duty fleet market. For more detailed information, please visit VSE's website at www.vsecorp.com.

ABOUT KELLSTROM AEROSPACE GROUP, INC.

Kellstrom is a leading full-service aftermarket solutions provider of value-added distribution and technical services for the commercial aerospace engine aftermarket. Differentiated by a highly technical, high-touch global sales and product line management organization, Kellstrom supports over 30 OEMs and approximately 800 customers, including airlines, air cargo operators, lessors, OEMs, and MROs across 75 countries.

FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements, including statements regarding expected benefits of the acquisition of Kellstrom. These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause VSE’s actual results to vary materially from those indicated or anticipated by such statements. Many factors could cause actual results and performance to be materially different from any future results or performance, including, among others, our ability to realize the expected benefits of the acquisition of Kellstrom and the risk factors described in our reports filed or expected to be filed with the SEC. Any forward-looking statement or statement of belief speaks only as of the date of this press release. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

INVESTOR RELATIONS CONTACT:
Michael Perlman
Vice President of Investor Relations and Treasury
Phone: (954) 547-0480
Email: investors@vsecorp.com

Source: VSE Corporation

Released December 3, 2024