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VSE has completed the acquisition of Turbine Controls, Inc., enhancing its OEM authorized repair capabilities in the high-growth MRO aviation market. The acquisition will accelerate VSE's MRO strategy, expand repair capability offerings, and strengthen its position in the commercial engine MRO aftermarket. The deal was valued at approximately $120 million, with $110 million in cash and $10 million in common shares.
VSE ha completato l'acquisizione di Turbine Controls, Inc., potenziando le sue capacità di riparazione autorizzate OEM nel mercato dell'aviazione MRO in forte crescita. L'acquisizione accelererà la strategia MRO di VSE, amplierà le offerte di capacità di riparazione e rafforzerà la sua posizione nel mercato secondario MRO per motori commerciali. Il valore dell'accordo è stato di circa 120 milioni di dollari, di cui 110 milioni in contanti e 10 milioni in azioni ordinarie.
VSE ha completado la adquisición de Turbine Controls, Inc., mejorando sus capacidades de reparación autorizadas por el fabricante en el mercado de aviación MRO de alto crecimiento. La adquisición acelerará la estrategia MRO de VSE, expandirá sus capacidades de reparación y fortalecerá su posición en el mercado secundario de MRO de motores comerciales. El acuerdo se valoró en aproximadamente 120 millones de dólares, con 110 millones en efectivo y 10 millones en acciones comunes.
VSE는 고성장 MRO 항공 시장에서 OEM 승인 수리 능력을 강화하기 위해 Turbine Controls, Inc.의 인수를 완료했습니다. 이번 인수는 VSE의 MRO 전략을 가속화하고, 수리 능력을 확장하며, 상업용 엔진 MRO 애프터마켓에서의 지위를 강화할 것입니다. 거래 가치는 현금 1억 1천만 달러와 보통주 1000만 달러를 포함하여 약 1억 2천만 달러로 평가되었습니다.
VSE a finalisé l'acquisition de Turbine Controls, Inc., renforçant ses capacités de réparation autorisées par les fabricants (OEM) sur le marché de la MRO aviation en forte croissance. L'acquisition va accélérer la stratégie MRO de VSE, étendre ses capacités de réparation et renforcer sa position sur le marché secondaire MRO des moteurs commerciaux. La transaction a été évaluée à environ 120 millions de dollars, dont 110 millions en espèces et 10 millions en actions ordinaires.
VSE hat die Übernahme von Turbine Controls, Inc. abgeschlossen, was seine OEM-zugelassenen Reparaturfähigkeiten auf dem stark wachsenden MRO-Luftfahrtmarkt verbessert. Die Akquisition wird die MRO-Strategie von VSE beschleunigen, die Reparaturkapazitäten erweitern und seine Position auf dem kommerziellen Motor-MRO-Nachmarkt stärken. Der Deal wurde auf etwa 120 Millionen Dollar bewertet, davon 110 Millionen in bar und 10 Millionen in Stammaktien.
Positive
Acquisition strengthens VSE's position in the commercial engine MRO aftermarket
Adds new OEM relationships and expands repair capability offerings
Deal valued at approximately $120 million, with $110 million in cash and $10 million in common shares
Negative
None.
Insights
VSE Corporation's acquisition of Turbine Controls underscores a strategic expansion within the aviation MRO sector. The $120 million transaction price suggests a significant investment in enhancing the company's service capabilities and OEM partnerships. A key factor for investors to consider is the cash-and-stock nature of the deal; $110 million in cash and $10 million in stock could reflect on VSE's liquidity position and dilution of existing shares. The expected synergies from the acquisition could lead to revenue growth, particularly in the commercial engine MRO aftermarket, a segment known for its high barriers to entry and long-term customer contracts. However, investors should monitor the integration process for any execution risks that might affect the projected growth and market share gains. The stock component of the payment also incentivizes alignment between VSE and the newly acquired unit, potentially smoothing integration and driving performance.
The strategic acquisition by VSE Corporation is indicative of the consolidation trend in the MRO aviation industry, which is experiencing growth driven by increasing air traffic and the need for the maintenance of aging aircraft. By acquiring a business with a strong foothold in engine and airframe component services, VSE could potentially leverage TCI's existing customer relationships and technical expertise to enhance its market position. For investors, understanding the competitive landscape is essential. The MRO market is characterized by high customer expectations, regulatory requirements and technical complexity. The addition of TCI's one-stop-shop model could provide VSE with a competitive advantage in meeting customer needs for comprehensive service offerings. Furthermore, the mention of next-generation engine platforms suggests an investment in future technologies, which could be pivotal for long-term growth. Nonetheless, investors should balance these potential benefits with the inherent risks of integrating complex technical operations and the potential impact on the company's financial health.
Acquisitions in the MRO aviation industry often entail more than financial implications; they are about gaining technical capabilities and market access. VSE's acquisition of Turbine Controls enhances its OEM authorized repair capabilities, which is critical as manufacturers continue to tighten control over repairs to maintain safety and reliability standards. For investors, the value lies in understanding how these new capabilities align with industry demands and technological advancements. TCI's reputation for one-stop-shop services across a range of engine and airframe components is a significant asset. It means that VSE will now have the ability to offer a broader scope of services, potentially attracting more business in a market where operators seek to minimize downtime and streamline maintenance operations. Furthermore, the mention of foundational and next-generation engine platforms by TCI suggests that VSE could be well-positioned to cater to both current and future market needs, which can be translated into sustainable growth in the long term.
Acquisition Enhances OEM Authorized Repair Capabilities Within the High-Growth MRO Aviation Market
ALEXANDRIA, Va.--(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 Turbine Controls, LLC (f/k/a Turbine Controls, Inc.) (“TCI”), a leading provider of aftermarket support services for the repair and overhaul of engine components and engine and airframe accessories.
MANAGEMENT COMMENTARY
“We are very pleased to officially welcome the TCI team to the VSE Aviation Family,” said John Cuomo, President and CEO of VSE Corporation. “The acquisition presents an opportunity for our VSE Aviation segment to accelerate its Maintenance, Repair, and Overhaul (“MRO”) strategy, including expanding our repair capability offerings and adding several new OEM relationships. In addition, the acquisition strengthens our position in the commercial engine MRO aftermarket while providing additional opportunities for organic growth and market share gains.”
Mr. Cuomo continued, “The TCI team built a leading MRO business focused on offering a unique one-stop-shop model across engine and airframe components and accessories. TCI’s highly technical and focused team, along with their expansive portfolio of repair capabilities across both foundational and next-generation engine platforms, is highly complementary to our VSE Aviation business.”
“Over the past 45 years, TCI has proudly delivered best-in-class service, and we have grown to become an industry leader in the MRO aftermarket,” said Glen Greenberg, Founder and CEO of TCI. “We are confident that the VSE Aviation family will carry on TCI’s legacy and facilitate its next phase of growth. As we look to the future, we will continue to strive for excellence and innovation, embracing the customer-first approach that has shaped our legacy and success.”
AGREEMENT TERMS
VSE acquired TCI for a total consideration of approximately $120 million, comprised of $110 million in cash and $10 million of common shares of the Company, subject to working capital adjustments.
ADVISORS
Jones Day served as legal counsel to VSE Corporation. RBC Capital Markets, LLC served as exclusive financial advisor and Greenberg Traurig, LLP served as legal counsel to Turbine Controls, Inc.
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.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements, including statements regarding expected benefits of the acquisition of TCI. 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 TCI 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
FAQ
What did VSE announce regarding Turbine Controls, Inc.?
VSE announced the completion of the acquisition of Turbine Controls, Inc., enhancing its OEM authorized repair capabilities in the high-growth MRO aviation market.
Who is the President and CEO of VSE ?
John Cuomo is the President and CEO of VSE
What was the total consideration for the acquisition of Turbine Controls, Inc.?
VSE acquired Turbine Controls, Inc. for approximately $120 million, with $110 million in cash and $10 million of common shares.
Which law firm served as legal counsel to VSE ?
Jones Day served as legal counsel to VSE
Who was the exclusive financial advisor to Turbine Controls, Inc.?
RBC Capital Markets, served as the exclusive financial advisor to Turbine Controls, Inc.
