VSE Corporation Prices Public Offering of Common Stock
VSE (NASDAQ: VSEC), a leading provider of aftermarket distribution and repair services, announced the pricing of its public offering of 2,112,676 shares of its common stock at $71.00 per share. The offering, expected to close on May 17, 2024, may raise approximately $141.0 million in net proceeds, after deducting underwriting discounts and commissions. VSE has granted underwriters a 30-day option to purchase up to an additional 316,901 shares. The proceeds will primarily be used to repay borrowings under its revolving loan facility and to support acquisitions, including Turbine Controls, Inc. Jefferies, RBC Capital Markets, and William Blair are among the joint lead book-running managers for the offering. The offering is being made via a preliminary prospectus supplement and an accompanying prospectus filed with the SEC.
- Pricing of public offering at $71.00 per share demonstrates confidence in VSE's market value.
- The potential to raise $141.0 million in net proceeds.
- Proceeds to be used for repaying revolving loan facility and supporting strategic acquisitions.
- Option granted to underwriters to purchase an additional 316,901 shares, indicating potential for increased capital.
- Multiple reputable financial institutions involved as joint lead book-running managers.
- Share dilution risk due to the issuance of 2,112,676 shares of common stock.
- Additional share offering option (316,901 shares) further increasing dilution risk.
- Dependence on successful closing of the offering by May 17, 2024, subject to customary closing conditions.
Insights
VSE Corporation's public offering of common stock priced at
Key aspects to consider include:
Debt Repayment: A significant portion of the proceeds will be used to repay outstanding borrowings. This can improve the company's balance sheet by reducing leverage, potentially lowering interest expenses and enhancing overall financial flexibility.
Acquisition Financing: Some funds will support the recent acquisition of Turbine Controls, Inc., which could bolster VSE’s market presence and operational capabilities in the aviation sector. Strategic acquisitions often bring synergies and growth opportunities, though they also bear integration risks.
Understanding these elements helps gauge the potential impact on VSE's financial health and future growth trajectory. For retail investors, paying attention to how effectively VSE utilizes these funds and the subsequent performance metrics post-acquisition will be critical in assessing the long-term benefits of this capital raise.
From a market perspective, this stock offering is indicative of VSE Corporation’s strategy to reinforce its market position and support growth initiatives. The company’s decision to price the shares at
Market Confidence: The detailed involvement of reputable underwriters like Jefferies, RBC Capital Markets and William Blair underscores the market's confidence in VSE. These institutions’ engagement typically signals robust due diligence and a positive outlook on the company's market performance and strategy.
Strategic Flexibility: With additional funds designated for future strategic acquisitions and general corporate purposes, VSE is positioning itself to be agile in seizing new growth opportunities. This flexibility is valuable in a competitive market, allowing VSE to swiftly execute on strategic initiatives that could drive future revenue.
Retail investors should consider how these strategic moves align with broader market trends and VSE’s historical performance. Evaluating competitive positioning post-acquisition and monitoring market response to these developments will provide further insights into the effectiveness of VSE’s strategic direction.
Net proceeds from the offering are expected to be approximately
Jefferies, RBC Capital Markets and William Blair are acting as joint lead book-running managers for the offering. Stifel and Truist are also serving as joint book-running managers for the offering. B. Riley and Benchmark are serving as co-managers for the offering.
A shelf registration statement relating to the securities being offered has been filed with the Securities and Exchange Commission (the “SEC”) and has been declared effective. The offering is being made only by means of a preliminary prospectus supplement and accompanying prospectus. A preliminary prospectus supplement and accompanying prospectus relating to the offering have been filed with the SEC and are available free of charge on the SEC’s website at http://www.sec.gov. The final prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC and may also be obtained, when available, from Jefferies LLC, Attn: Equity Syndicate Prospectus Department, 520 Madison Avenue,
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities described herein, nor shall there be any sale of the securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such jurisdiction.
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 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 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, and Section 21E of the Securities Exchange Act of 1934, as amended. All such statements are intended to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and this statement is included for purposes of such safe harbor provisions.
“Forward-looking” statements, as such term is defined by the SEC in its rules, regulations and releases, represent our expectations or beliefs, including, but not limited to, statements concerning our expectations regarding the offering of common stock, including the expected timing of the closing and use of proceeds, our expectation that we will complete the proposed offering, our operations, economic performance, financial condition, the impact of widespread health developments, the health and economic impact thereof and the governmental, commercial, consumer and other responses thereto, growth and acquisition strategies, investments and future operational plans. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “forecast,” “seek,” “plan,” “predict,” “project,” “could,” “estimate,” “might,” “continue,” “seeking” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements.
These statements speak only as of the date of this press release and we undertake no ongoing obligation, other than that imposed by law, to update these statements. These statements relate to, among other things, our intent, belief or current expectations with respect to: our future financial condition, results of operations or prospects; our business and growth strategies; and our financing plans and forecasts. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, certain of which are beyond our control, and that actual results may differ materially from those contained in or implied by the forward-looking statements as a result of various factors, some of which are unknown, including, without limitation:
- supply chain delays and disruptions;
- risks related to our work on large government programs;
- our ability to successfully integrate and realize the anticipated benefits of recently acquired businesses, including the recently-acquired Turbine Controls, Inc. business;
- our ability to successfully divest businesses, including our Federal and Defense segment, and to transition facilities in connection therewith;
- risks related to future business conditions resulting in impairments;
- risks related to the intense competition in our industry;
- risks related to the performance of the aviation aftermarket;
- global economic and political conditions;
- prolonged periods of inflation and our ability to mitigate the impact thereof;
- challenges related to workforce management or any failure to attract or retain a skilled workforce;
- our dependence on third-party package delivery companies;
- our compliance with government rules and regulations, including environmental and pollution risk;
- risks related to technology security and cyber-attacks;
- risks related to our outstanding indebtedness;
- risks related to market volatility in the debt and equity capital markets; and
- the other factors identified in our reports filed or expected to be filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024.
You are advised, however, to consult any further disclosures we make on related subjects in our periodic reports on Forms 10-K, 10-Q or 8-K filed with or furnished to the SEC.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240514707585/en/
INVESTOR RELATIONS CONTACT:
Michael Perlman
Vice President of Investor Relations and Treasury
Phone: (954) 547-0480
Email: investors@vsecorp.com
Source: VSE Corporation
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