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.

• Diversifies end-market and customer exposure across commercial, cargo, business, general aviation, rotorcraft, OEMs, lessors, and defense, serving over 10,000 active customers.

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

• Enhances long-term value creation for customers, suppliers, employees, and shareholders, leveraging a proven integration playbook and history of successful M&A.

• Adds complementary business units, including 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.

• Up to $125 million in additional contingent earnout based on 2026 adjusted EBITDA performance.

• Upfront consideration represents ~13.5x PAG's expected 2025 adjusted EBITDA, including full run-rate synergies.

• Cash portion supported by a fully committed bridge facility; interest rate consistent with current debt.

• Equity issued to GenX/GenNx360 Capital Partners.

Synergies and expected cost savings

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

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

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

• Consolidated adjusted EBITDA margin expected to exceed 20% as integration progresses.