VSE Corp. To Buy Four Aviation Support Companies From Killick Aerospace Group

(RTTNews) - VSE Corp. (VSEC) said Wednesday that it has agreed to acquire four aviation support companies from Killick Aerospace Group. The company noted that the acquisition of these four business units will extend its supply chain management as well as maintenance, repair and overhaul or MRO to the aviation market.

The four business units being acquired by VSE Corp. consist of Prime Turbines - including both U.S. and Germany-based operations, CT Aerospace, Kansas Aviation, and Air Parts & Supply Co. These four companies specialize in MRO services and parts supply for corporate and regional jet aircraft engines as well as engine accessories.

Alexandria, Virginia-based VSE Corp. provides vehicle fleet and equipment sustainment services for the U.S. Department of Defense or DoD legacy systems and equipment, and also provides professional services to DoD as well as federal civilian agencies.

VSE Corp. noted that the initial purchase price payable upon closing of the deal is about $184 million in cash.

In addition, the purchase agreement includes potential post-closing payments of up to $40 million if CT Aerospace, Kansas Aviation, and Air Parts & Supply Co. exceed certain thresholds of earnings before interest, taxes, depreciation and amortization or EBITDA during the first two years after the closing.

The deal also includes one additional post-closing payment of $5 million if these companies surpass a certain EBITDA threshold during any 12-consecutive month period in 2014 and 2015.

Maurice "Mo" Gauthier, CEO and President of VSE Corp. said, "This acquisition significantly enhances our sustainment competencies, consisting of supply chain management and MRO. It broadens and diversifies our client base while concurrently expanding our product and service offerings for existing clients."

For the year ending December 31, 2014, these four business units are estimated to have combined sales and income before taxes of about $111 million and $22 million, respectively. The four units have about 185 employees.

Carrollton, Texas-based Prime Turbines is an independent turboprop engine repair, maintenance and overhaul company specializing in Pratt & Whitney Canada and GE Aviation engines. The company has five service centers located in the U.S. and Europe.

CT Aerospace, also based in Carrollton, Texas, is a supplier of engine parts and related services to corporate aircraft MRO companies. Kansas-based Kansas Aviation specializes in the overhaul and repair of oil, air and fuel-related engine accessories for a variety of turboprop, turbofan and gas turbine engines.

Miami, Florida-based Air Parts & Supply Co. or APSCO is an aircraft parts supplier specializing in the distribution of aircraft ignition parts, fuel control parts, starter generators, and starter generator parts for aircraft turbine engines.

VSEC is trading at $64.00, up $2.79 or 4.56 percent on a volume of 6,046 shares.