MRO specialist provider VSE Corporation has agreed a deal to acquire the parent of rival Desser Aerospace for $124 million.
The deal which was announced on May 4, is expected to close within 90 days of being made public, subject to regulatory approvals.
As part of the deal VSE will sell Desser’s proprietary solutions businesses, including Seginus Aerospace, AOG Aviation Spares, and DAC Engineered Products, to the Loar Group for $30 million.
This will support opportunities for VSE to both distribute Loar’s products to the global aftermarket and support Loar products through its MRO capabilities.
VSE said the total cash outlay will be approximately $94 million and that it expects to complete an amendment to its credit facility to fund the acquisition.
In a statement announcing the deal VSE said: “This transaction fits well within the company’s recently announced strategic priorities and focus on higher-growth, higher-margin aftermarket services and solutions.
“As the company continues to build long-term, sustainable sources of profitable revenue, aviation will be a key driver of growth for VSE.”
Desser Aerospace is expected to expand and diversify the existing operations of the aviation segment, driving continued, above-market growth.
VSE said: “This growth will be driven by multiple revenue synergies, including cross-selling opportunities, leveraging VSE’s infrastructure to scale Desser’s business more quickly, and expanding VSE’s geographic reach into new international markets.”
John Cuomo, president and chief executive of VSE Corporation, said: “I am proud to announce today’s transaction as another meaningful step in the execution of our multi-year business transformation plan centered on pursuing strategic organic and inorganic opportunities that allow us to expand our aerospace distribution and MRO service offerings.
“The acquisition supports our tip-to-tail aircraft distribution and MRO services strategy and provides VSE access to the highly fragmented commercial and B&GA aftermarkets.
“Desser, and their family of businesses, also provide a platform for geographic expansion in high-growth international markets. This value-enhancing acquisition is consistent with VSE’s capital-allocation priorities and positions our business for an incredibly bright future.”
Desser Aerospace was founded in 1920 and is the world’s largest independent distributor of aircraft tires and tubes, a leading global distributor of brakes and batteries, and a component MRO services provider.
Its global distribution and MRO operation locations in California, Tennessee, the UK, and Australia, serve a diverse and attractive aftermarket customer base across all aviation industry segments, including commercial aviation, business and general aviation, and military aftermarket customers.
Ben Thomas, president of VSE Aviation, added: “We are excited to welcome the Desser, Desser Australia, Watts Aviation, Aero Wheel and Brake, Cee Bailey’s, and Rotable Repairs team to the VSE Aviation family.
“We look forward to building on Desser Aerospace’s track record of success as a specialized, highly technical supplier. Together we will offer our respective customers an expanded portfolio of products and services while accelerating the growth of the combined businesses.”
