VSE Corporation to Acquire Precision Aviation Group in $2 Billion Deal

This article is based on an official press release from VSE Corporation.

VSE Corporation to Acquire Precision Aviation Group in $2 Billion Deal

VSE Corporation (NASDAQ: VSEC) has announced a definitive agreement to acquire Precision Aviation Group (PAG) for approximately $2.025 billion. The transaction, described by the company as “transformational,” aims to solidify VSE’s position as a leading independent provider of aviation aftermarket distribution and repair services. The deal is expected to close in the second quarter of 2026, subject to customary regulatory approvals.

According to the official announcement, the acquisitions will significantly expand VSE’s maintenance, repair, and overhaul (MRO) capabilities. By integrating PAG’s network, VSE projects an increase in its pro forma 2025 aviation revenue by approximately 50%, adding roughly $615 million in annualized revenue.

Transaction Structure and Financing

The total consideration for the acquisition is valued at approximately $2.025 billion. VSE Corporation outlined the financial structure of the deal, which includes a mix of cash and equity:

• Cash Consideration: Approximately $1.75 billion.
• Equity Consideration: Approximately $275 million in VSE shares issued to the seller, GenNx360 Capital Partners.
• Earnout Potential: An additional $125 million may be paid based on PAG’s adjusted EBITDA performance in 2026.

To fund the cash portion of the transaction, VSE has secured a fully committed bridge facility. The company also noted that recent equity offerings have helped strengthen its balance sheet in preparation for strategic moves of this magnitude. GenNx360 Capital Partners will retain a minority equity stake in the combined entity following the close of the transaction.

Strategic Rationale and Market Impact

VSE Corporation views this acquisition as a critical step in its multi-year strategy to become a pure-play aviation aftermarket leader. The combination of VSE and PAG will create a global network comprising approximately 60 locations. The company expects the deal to be immediately accretive to margins, projecting that the high-margin nature of PAG’s business will drive VSE’s consolidated Adjusted EBITDA margin above 20% in the coming years.

John Cuomo, President and CEO of VSE Corporation, highlighted the strategic importance of the deal in a statement:

“This acquisition represents a pivotal moment for VSE and a major milestone in our strategy to build a scaled, differentiated, higher-margin aviation aftermarket platform.”

The acquisition brings deep technical expertise in avionics, components, and accessories to VSE, complementing its existing engine support and distribution services. VSE targets over $15 million in annualized run-rate synergies, which it plans to achieve through cross-selling opportunities, insourcing repairs, and operational efficiencies.

Profile of Precision Aviation Group

Headquartered in Atlanta, Georgia, Precision Aviation Group is a prominent provider of MRO services and supply chain solutions for mission-critical aircraft. The company operates 29 repair stations and distribution facilities worldwide. PAG serves a diverse range of sectors, including commercial aviation, business and general aviation (B&GA), rotorcraft, and defense.

Pratik Rajeevan of GenNx360 Capital Partners expressed confidence in the future of the combined platform:

“Our significant equity rollover reflects our conviction in PAG’s momentum and in VSE’s ability to scale the platform.”

AirPro News Analysis

This acquisition arrives at a time when the aviation aftermarket is experiencing heightened demand due to global fleet dynamics. With delays in new aircraft deliveries from major manufacturers, airlines are operating older aircraft for longer periods. This “aging fleet” trend directly benefits MRO providers like PAG and VSE, as older airframes require more frequent maintenance and parts replacement.

Furthermore, ongoing supply chain constraints have placed a premium on available inventory. By combining VSE’s distribution capabilities with PAG’s repair stations, the merged entity is likely positioning itself to better control the supply chain and capture value from the current market scarcity. However, the significant cash component of the deal will increase VSE’s leverage, making the rapid realization of the projected $15 million in synergies and strong cash flow generation critical for de-leveraging in the post-acquisition period.

Financial Outlook

Prior to this announcement, VSE reported strong financial performance, with Q3 2025 revenue reaching $283 million, a 39% increase year-over-year. The company’s full-year 2025 revenue guidance was set between $1.1 billion and $1.15 billion. Following the integration of PAG, VSE anticipates a temporary spike in net leverage but targets a long-term ratio of 3.0x to 3.5x, intending to use free cash flow to reduce debt rapidly.

Sources: VSE Corporation (Business Wire)