VSE (VSEC) M&A announcement summary

Deal rationale and strategic fit

• Acquisition creates a scaled, pure-play aviation aftermarket platform with expanded global footprint, proprietary repair solutions, and broader technical capabilities, serving over 10,000 customers across commercial, cargo, business, general aviation, rotorcraft, OEMs, lessors, and defense.

• Strengthens capabilities in MRO, distribution, and proprietary solutions, supporting rapid component replacement, improved fleet readiness, and asset life extension.

• Enhances resilience through market cycles by diversifying end markets and expanding proprietary solutions.

• Aligns with a focused aviation strategy, leveraging a proven integration playbook and history of successful M&A.

• Adds complementary business units: component, engine, avionics services, and proprietary solutions.

Financial terms and conditions

• Total upfront consideration of $2.025 billion: $1.75 billion in cash and $275 million in equity to the seller, subject to customary adjustments and lockup periods.

• Up to $125 million in contingent earnout based on 2026 adjusted EBITDA, payable in cash or equity.

• Transaction represents approximately 13.5x PAG's expected 2025 adjusted EBITDA, including full run-rate synergies.

• Cash portion supported by a fully committed bridge facility; equity issued to GenX/GenNx360 Capital Partners.

• Expected to close in Q2 2026, subject to regulatory approvals and customary closing conditions.

Synergies and expected cost savings

• Over $15 million in annualized synergies expected through phased integration of operational and corporate support functions.

• Synergies to be realized via cross-selling, insourcing, procurement savings, network optimization, supply chain improvements, and operational efficiencies.

• Additional upside possible from sales and revenue synergies as integration progresses.

• Consolidated adjusted EBITDA margin expected to exceed 20% over the next few years as integration progresses.