VSE Corporation to sell Wheeler Fleet Solutions for $230 million

Published 18/02/2025, 13:06
VSE Corporation to sell Wheeler Fleet Solutions for $230 million

MIRAMAR, Fla. - VSE Corporation (NASDAQ: VSEC), a prominent provider of aftermarket distribution and repair services with a market capitalization of $1.99 billion, has struck a definitive deal to sell its Fleet business segment, Wheeler Fleet Solutions, to private equity firm One Equity Partners (OEP) for a potential total of $230 million. The transaction includes a $140 million cash payment, a $25 million seller note, and up to $65 million in additional contingent earnout consideration. According to InvestingPro data, VSE has demonstrated impressive revenue growth of 27.51% over the last twelve months.

John Cuomo, President and CEO of VSE Corporation, stated that the sale marks the final step in the company's strategic shift to focus solely on aviation aftermarket parts and services, aiming to enhance growth and margins. He expressed gratitude to the Wheeler Fleet Solutions team for their efforts in diversifying the customer base and expanding product offerings. The company's strong financial position is reflected in its 48-year track record of consistent dividend payments, as highlighted by InvestingPro, which offers comprehensive analysis of VSE's financial health and growth prospects through its Pro Research Reports.

Ori Birnboim, Partner at OEP, conveyed enthusiasm for the partnership with Wheeler Fleet Solutions, citing steady demand in North America's truck fleet industry and the company's 65-year history of service excellence. Steve Lunau, another OEP Partner, emphasized their commitment to fostering Wheeler Fleet Solutions' growth, leveraging their experience in industrial distribution business transformations.

The sale is anticipated to finalize in the second quarter of 2025, pending customary closing conditions. Legal counsel for the transaction was provided by Jones Day, while Jefferies, LLC acted as the exclusive financial advisor to VSE Corporation.

VSE Corporation, with its focus on the aviation sector, provides aftermarket parts distribution and maintenance, repair, and overhaul services to various aviation operators. Before the divestiture, its Fleet segment catered to the medium and heavy-duty fleet market with part distribution and engineering solutions.

One Equity Partners, a middle-market private equity firm, targets investments in the industrial, healthcare, and technology sectors across North America and Europe. Since its inception, OEP has completed over 400 transactions globally.

This news is based on a press release statement from VSE Corporation. The company cautions that forward-looking statements within the release are subject to risks and uncertainties, and actual results may differ materially from those projected. Currently trading at $97.28, with analyst targets ranging from $129 to $140, VSE appears overvalued according to InvestingPro's Fair Value analysis, though it maintains a strong market position with a P/E ratio of 117.41.

In other recent news, VSE Corporation has made strides in its expansion efforts with the completed acquisition of Kellstrom. This strategic move, which involved a total consideration of $200 million, is expected to enhance VSE's geographic reach, diversify its customer base, and increase its presence in the engine market. The acquisition also aims to broaden the company's distribution capabilities.

RBC Capital Markets expressed confidence in VSE Corporation's future performance following the acquisition, maintaining an Outperform rating and increasing the price target to $135 from $125. Kellstrom's established relationships in the United States Military and Maintenance, Repair, and Overhaul markets are seen as valuable for their potential to positively impact margins.

These recent developments underscore VSE Corporation's broader efforts to grow and strengthen its market position. With Kellstrom's capabilities and resources now part of its arsenal, VSE is poised to bolster its service offerings and customer support.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.