VSE Corporation VSEC announced today that it has signed a definitive
agreement to acquire four business units from Killick Aerospace Group,
consisting of Prime Turbines (including both U.S. and Germany-based
operations), CT Aerospace, Kansas Aviation and Air Parts & Supply Co. The
companies to be acquired specialize in maintenance, repair and overhaul (MRO)
services and parts supply for corporate and regional jet aircraft engines and
engine accessories. The initial purchase price payable upon the closing is
approximately $184 million in cash. The purchase agreement also includes
potential post-closing payments of up to $40 million if CT Aerospace, Kansas
Aviation and Air Parts & Supply Co. surpass certain thresholds of earnings
before interest, taxes, depreciation and amortization (“EBITDA”) during the
first two years after the closing and one additional post closing payment of
$5 million if such companies surpass a certain EBITDA threshold during any
12-consecutive month period in 2014 and 2015. Other purchase price adjustments
also may be required based on certain post-closing determinations, including
in respect of the closing net working capital and certain inventory and
equipment.
The four business units combined sales and income before taxes are estimated
to be approximately $111 million and $22 million, respectively, for the year
ending December 31, 2014. Such estimated results are not necessarily
indicative of future financial performance and the actual results of the four
business units for 2014 may differ from the estimated results. The four
business units have approximately 185 employees.
“This acquisition significantly enhances our sustainment competencies,
consisting of supply chain management and MRO,” said VSE CEO and President,
Maurice “Mo” Gauthier. “It broadens and diversifies our client base while
concurrently expanding our product and service offerings for existing clients.
Similar to our acquisition of Wheeler Bros., Inc. a few years ago, the
addition of these aviation groups is in line with our long-term
diversification strategy and the transformational pivot we are making into
broader offerings and markets. We are focused on expanding our sustainment
competencies to extend the service life of mission critical equipment,
vehicles, ships and aircraft in government and commercial sectors.”
A summary of each of the four Killick business units is provided below:
* Prime Turbines
* Prime Turbines is a leading independent turboprop engine repair,
maintenance and overhaul company specializing in Pratt & Whitney
Canada and GE Aviation engines. Headquartered in Carrollton, Texas,
with five service centers located throughout the United States and
Europe.
* CT Aerospace
* CT Aerospace is a leading supplier of engine parts and related
services to corporate aircraft MRO companies. CT Aerospace
specializes in Pratt & Whitney Canada JT15D, PT6 and PW100 engines
and engine parts. Headquartered in Carrollton, Texas.
* Kansas Aviation
* 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. Headquartered in Independence,
Kansas.
* Air Parts & Supply Co. (APSCO)
* 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.
Headquartered in Miami, Florida.
"We look forward to bringing our quality solutions and capabilities and our
team of customer oriented professionals to VSE,” said Paul Goffredi, COO of
Killick Aerospace Group. “Sharing a similar culture and focus of helping our
respective clients to extend the life for their aging, but valuable
transportation assets, we believe the acquisition will be beneficial to both
companies. VSE offers us the opportunity to penetrate new government and
international markets and to expand our capabilities, while our aviation
support companies will provide VSE greater diversity to their supply chain
management and MRO product and service offerings.”
VSE received legal advice for the acquisition from Arent Fox LLP, Washington,
D.C. The Killick Aerospace Group was advised by Wells Fargo Securities, LLC
(financial advisor) as well as Dentons USA LLP and Osler, Hoskin & Harcourt
LLP (legal advisors).
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