The acquisition of Desser Aerospace by VSE Corporation was completed for a cash consideration of $124 million, subject to customary working capital adjustments.
VSE Corporation, a renowned provider of aftermarket distribution and maintenance, repair, and overhaul (MRO) services for transportation assets in air, land, and sea domains, has successfully completed its acquisition of Desser Holding Company LLC (known as Desser Aerospace), a global provider of specialty distribution and MRO solutions. Simultaneously, VSE Corporation sold Desser Aerospace’s Proprietary Solutions businesses to the Loar Group Inc., a diversified aerospace and defense manufacturer and supplier.
The acquisition of Desser Aerospace by VSE Corporation was completed for a cash consideration of $124 million, subject to customary working capital adjustments. Concurrently, the company divested Desser Aerospace’s Proprietary Solutions businesses, which encompass Seginus Aerospace, AOG Aviation Spares, and DAC Engineered Products, to the Loar Group for a cash consideration of $30 million. The net cash outlay for the assets acquired by VSE Corporation amounted to $94 million.
John Cuomo, President and CEO, VSE Corporation said, “We are excited to officially welcome the talented Desser Aerospace team to our VSE Aviation business. The acquisition marks an important step on our path to increase the Company’s exposure to the high-growth, higher-margin aviation distribution and MRO markets.”
Cuomo emphasized the strategic value of combining Desser Aerospace’s distribution and repair capabilities with VSE Aviation’s aftermarket business, noting that it broadens their product and service portfolio and establishes a platform for expansion into international markets.
“VSE Aviation and Desser Aerospace have long been committed to providing market-leading, technical solutions that enhance the value and performance of their customers’ aircraft,” said Ben Thomas, President, VSE Aviation. “We’re excited to bring these two teams together as we look to create one organization focused on supporting the unique needs of our combined customer bases,” he further added.
To finance the acquisition, VSE Corporation amended its existing credit facility with its lending syndicate. The amendment included an incremental $90 million Term Loan A and a revision of certain financial covenants of the existing credit facility. The company utilized the proceeds from Term Loan A and a $4 million drawdown on its existing credit facility to fund $90 million of the purchase price.
VSE Corporation received legal counsel from Jones Day during the acquisition process, while Jefferies LLC acted as the financial advisor to Desser Holding Company LLC.
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This strategic acquisition and divestiture by VSE Corporation signify its commitment to strengthening its position in the aviation distribution and MRO markets. By expanding its product and service offerings and exploring international markets, the company aims to further enhance its industry presence and deliver comprehensive solutions to its valued customers.
