UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.02 | Termination of a Material Definitive Agreement. |
As previously announced, on May 1, 2023, VSE Corporation (the “Company”) entered into a definitive agreement to sell its Federal and Defense business (the “FDS Business”) to ASG Operations, LLC (the “Purchaser”), an affiliate of Bernhard Capital Partners Management, LP (“BCP”). Under the terms of the membership interest purchase agreement, dated as of May 1, 2023 (the “Purchase Agreement”), between the Company, Arena Solutions Group, LLC (successor in interest to Hurricane FDS Company, LLC), a wholly-owned subsidiary of the Company (the “Seller”), and the Purchaser, the Purchaser agreed to acquire the FDS Business (the “FDS Transaction”) for consideration consisting of a $50 million cash payment at the closing and a potential earn-out payment of up to $50 million, which earn-out payment was subject to the achievement by the FDS Business of certain milestones.
On September 27, 2023, the Company, the Seller, the Purchaser, and BCP entered into an Amendment and Termination to Membership Interest Purchase Agreement (the “Termination Agreement”), effective as of September 27, 2023, pursuant to which the parties mutually agreed to terminate the Purchase Agreement. The Company believes the decision to terminate the agreement provides an opportunity to move more quickly and effectively toward the sale of the FDS Business or its assets. Necessary approvals and closing conditions to effectuate the divestiture are no longer expected to be completed in a reasonable amount of time, for reasons unrelated to VSE or BCP. No party will be required to pay any termination fee as a result of the mutual decision to terminate the Purchase Agreement, and the parties will each bear their respective costs and expenses.
The foregoing summary of the Purchase Agreement and the Termination Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Purchase Agreement, which was filed with the Securities and Exchange Commission as Exhibit 2.1 to the Company’s Current Report on Form 8-K on May 5, 2023, and the full text of the Termination Agreement, which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
| Item 8.01 | Other Events |
On September 27, 2023, the Company issued a press release announcing the mutual termination of the Purchase Agreement, a copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit | Description | |
| 10.1 | Amendment and Termination to Membership Interest Purchase Agreement, dated as of September 27, 2023, by and between VSE Corporation, Arena Solutions Group, LLC, ASG Operations, LLC and Bernhard Capital Partners Management, LP. | |
| 99.1 | Press Release, dated September 27, 2023. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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VSE CORPORATION | ||||
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(Registrant) | ||||
| Date: September 27, 2023 |
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/s/ Stephen D. Griffin | ||||
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Stephen D. Griffin Senior Vice President and Chief Financial Officer | ||||