|3 Months Ended|
Mar. 31, 2020
|Business Combinations [Abstract]|
On January 28, 2020 VSE’s subsidiary VSE Aviation, Inc. entered into two definitive agreements to sell (1) Prime Turbines LLC ("Prime Turbines") for a sale price of $20.7 million and (2) certain related inventory assets for $8.5 million to PTB Holdings USA, LLC ("PTB"). The transaction was completed on February 26, 2020 with cash proceeds of $20.7 million, subject to working capital adjustments, and a note receivable of $8.5 million received as consideration.
Prime Turbines is a provider of turboprop aircraft engine repair, maintenance and overhaul, including for Pratt & Whitney Canada PT6A and PT6T series engines. Prime Turbines was included in our Aviation segment.
The divestiture of Prime Turbines will not have a material impact on the Company’s operations and financial results, and therefore does not qualify for reporting as a discontinued operation.
As a result of the sale of the business and inventory, the Company derecognized the assets and liabilities of Prime Turbines and recorded a $7.5 million non-cash loss during the three months ended March 31, 2020 which is reflected as loss on sale of a business entity and certain assets in the consolidated statements of income. Additionally, a note receivable from PTB of $6.0 million and $1.5 million as of March 31, 2020 is included in other assets, and other current assets in our consolidated balance sheets, respectively, which represents the present value of the consideration to be received with an imputed interest rate discount.
The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef