ALEXANDRIA, Va.--(BUSINESS WIRE)--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 HAECO Special Services, LLC from HAECO Airframe Services, LLC, a division of HAECO Americas (“HAECO”), in an all cash transaction.

HSS is a leading provider of fully integrated MRO support solutions for military and government aircraft. HSS offers scheduled depot maintenance, contract field deployment and unscheduled drop-in maintenance for a U.S. Department of Defense contract specifically for the sustainment of the U.S. Air Force (“USAF”) KC-10 fleet. The experienced workforce of HSS includes nearly 280 employees operating from two hangar locations in Greensboro, North Carolina.

Transaction Rationale

• Expands VSE Federal & Defense MRO capabilities. HSS expands VSE’s aircraft MRO capabilities and provides VSE with access to new facilities, certifications and technical expertise required to provide end-to-end support for government aircraft fleet throughout their useful lives. HSS has averaged 30 aircraft introductions and 400,000 man-hours of aircraft maintenance per year since 2015. These capabilities expand VSE’s existing USAF programs Contract Field Teams programs.

• Strong backlog and contract visibility. HSS’ long-standing relationship with the USAF, including support of the products, has resulted in consistent cash flows from operations with minimal capital expenditure requirements. As a subcontractor under the current KC-10 contract, HSS’ calendar-driven maintenance provides contracted revenue visibility into 2025.

• New contract opportunities. VSE views additional opportunities to further diversify HSS’ contract mix beyond the KC-10 contract, including both subcontractor and prime roles on aircraft sustainment and modification programs.

• Financially accretive transaction. This transaction isimmediately accretive to VSE’s Federal & Defense Segment. HSS’s value-added service offerings support the higher margin, technical services strategic focus for the segment.

Management Commentary

“We are excited to welcome the outstanding HAECO Special Services team to VSE,” stated John Cuomo, President and CEO of VSE Corporation. “This transaction further expands our value-added suite of MRO solutions available to military customers, while positioning us to capitalize on higher-margin technical service opportunities. HSS’ operating income and cash flow profile, strong backlog and contract diversification efforts are highly complementary to our Federal & Defense Services business and strategy, positioning us to further support military and government customers with on-demand MRO support for aging, mission-critical assets.”

Advisors

Jones Day served as legal counsel to VSE Corporation. Covington served as legal counsel to HAECO. Jefferies LLC served as financial advisor to HAECO.

ABOUT VSE CORPORATION

VSE is a leading provider of aftermarket distribution and repair services for land, sea and air transportation assets for government and commercial markets. Core services includemaintenance, repair and overhaul (MRO) services, parts distribution, supply chain management and logistics, engineering support, and consulting and training services for global commercial, federal, military and defense customers. VSE also provides information technology and energy consulting services. www.vsecorp.com

ABOUT HAECO AMERICAS

A wholly owned subsidiary of the HAECO Group, HAECO Americas (formerly TIMCO Aviation Services) supports global aircraft operators and owners with comprehensive aircraft care services including base maintenance from two multi-hangar locations and engine MRO support in the U.S. The company’s HAECO Cabin Solutions division provides interiors design, engineering, certification, and cabin reconfiguration services, as well as manufactured products including passenger seating, structures, galleys, and lavatories. www.haeco.aero