VSE Corporation Acquires Global Parts Group, Inc.

VSE Corporation (NASDAQ: VSEC), a leading provider of aftermarket distribution and maintenance, repair, and overhaul (MRO) services for land, sea and air transportation assets for government and commercial markets, today announced that it has acquired privately held Global Parts Group, Inc. (Global Parts) in an all-cash transaction valued at approximately $38 million, subject to customary working capital adjustments.

Global Parts is a fully integrated aftermarket distribution and MRO services provider supporting the global business and general aviation (B&GA) market. Global Parts’ distribution business focuses on supporting airframe components, while its repair capabilities extend to hydraulics and pneumatics. Global Parts’ experienced workforce operates from its distribution and MRO center of excellence in Augusta (Wichita), Kansas.

TRANSACTION RATIONALE

• Better positions VSE Aviation as a leading, comprehensive distribution and MRO solution provider to the B&GA market. By combining VSE Aviation’s existing B&GA part distribution and engine component accessories MRO services with Global Parts’ airframe-centric product distribution and MRO capabilities, business jet customers will have access to a more comprehensive on-demand repair and distribution solution unique to the market.

• Provides VSE Aviation with a diverse, growing base of new B&GA owners and operators. This transaction provides VSE access to Global Parts’ more than 3,000 small- and medium-sized business jet customers, representing more than 100 platforms. VSE Aviation expects to generate meaningful revenue opportunities as both new and existing business jet customers leverage the full breadth of combined repair and distribution capabilities.

• Better positions VSE as a consolidator of high quality, complementary B&GA assets. Given the fragmented nature of the B&GA services industry, this transaction further positions VSE as a well-capitalized market consolidator focused on achieving efficiencies of scale through both organic and inorganic growth.

• Financially accretive transaction. Global Parts generated approximately $65 million in total revenue in 2020. This transaction is immediately accretive to VSE’s Aviation segment.

MANAGEMENT COMMENTARY