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VSE Corporation (NASDAQ:VSEC), a provider of engineering services with a market capitalization of $2.08 billion and impressive revenue growth of 27.5% over the last twelve months, has entered into a definitive agreement to sell its Fleet segment, including all shares of Wheeler Fleet Solutions and related real estate, to One Equity Partners. The deal, announced on Monday, is valued at up to $230 million.
The transaction comprises a $165 million payment at closing—$140 million in cash and $25 million via a seller note—and an additional earn-out of up to $65 million, contingent on reaching specific milestones. The sale is projected to be finalized in the second quarter of 2025, pending customary closing conditions and approvals.
VSE Corp plans to utilize the net proceeds from the sale to reduce its existing debt under its credit facility. This strategic move aligns with VSE Corp’s broader efforts to streamline operations and strengthen its financial position. According to InvestingPro data, the company currently operates with a moderate debt level and maintains strong liquidity with a current ratio of 3.69, indicating robust short-term financial health.
This news is based on a recent SEC filing, which provides detailed information about the terms of the agreement and the involved parties. The filing includes a copy of the stock purchase agreement, which outlines the specifics of the transaction.
Investors and stakeholders of VSE Corporation can expect the company to focus on its core businesses and improve its balance sheet following the completion of this divestiture. The precise impact of the transaction on the company’s financials will likely become more apparent as VSE Corp progresses towards the closing of the deal.
Currently trading at a relatively high P/E ratio of 123.4, InvestingPro analysis suggests the stock may be overvalued, with additional insights available in the comprehensive Pro Research Report covering this and 1,400+ other US equities.
In other recent news, VSE Corporation has announced a definitive agreement to sell its Wheeler Fleet Solutions business segment to One Equity Partners for up to $230 million.
The transaction involves a $140 million cash payment, a $25 million seller note, and up to $65 million in contingent earnout consideration. This move aligns with VSE Corporation’s strategic focus on its aviation aftermarket parts and services, aiming to improve growth and margins. The sale is expected to close in the second quarter of 2025, subject to customary conditions.
Additionally, RBC Capital Markets has increased its price target for VSE Corporation to $135 from $125, maintaining an Outperform rating. This update follows VSE’s recent acquisition of Kellstrom for $200 million, a deal expected to enhance the company’s geographic reach and customer base.
Analysts at RBC Capital anticipate synergies from Kellstrom’s established relationships in the United States Military and Maintenance, Repair, and Overhaul markets. The acquisition is part of VSE Corporation’s strategy to strengthen its market position and expand its service offerings.
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