VSE Corporation Announces Transformational Acquisition of Precision Aviation Group
VSE Corporation (NASDAQ: VSEC), a leading provider of aviation aftermarket distribution, maintenance, repair, and overhaul services, announced today that it has entered into a definitive agreement to acquire Precision Aviation Group, Inc. (“PAG”), a global aviation aftermarket services provider and a portfolio company of GenNx360 Capital Partners. The transaction, valued at approximately $2.025 billion in upfront consideration, represents a transformational step in VSE’s strategy to build a scaled, higher-margin, and globally diversified aviation aftermarket platform.
The acquisition is expected to significantly expand VSE’s operational scale, technical capabilities, and proprietary repair content while strengthening its position as a mission-critical partner to aviation operators across commercial, business and general aviation, rotorcraft, and defense markets worldwide.
Overview of Precision Aviation Group
Founded in 1996 and headquartered in Atlanta, Georgia, Precision Aviation Group has built a reputation as a best-in-class provider of aviation maintenance, repair, and overhaul (MRO) services, parts distribution, and integrated supply chain solutions. PAG serves a broad global customer base spanning commercial airlines, business and general aviation operators, rotorcraft fleets, and defense customers.
PAG operates 29 facilities across North America, Europe, and Asia, employs more than 1,000 highly skilled professionals, and supports more than 10,000 customers worldwide. The company completes in excess of 175,000 repairs annually and is expected to generate approximately $615 million in adjusted revenue for the fiscal year ended December 31, 2025.
PAG’s diversified service offering, global footprint, and technical expertise have enabled it to deliver consistent performance across aviation cycles, positioning the company as a highly complementary strategic addition to VSE’s existing aviation aftermarket portfolio.
Strategic Impact of the Transaction
The combination of VSE and PAG is expected to create a more diversified and globally scaled aviation aftermarket platform with enhanced technical breadth and deeper proprietary solutions content. The combined company will offer customers a broader range of mission-critical services designed to improve fleet reliability, extend asset life, and reduce total cost of ownership.
Following the transaction, VSE and PAG together are expected to operate approximately 60 locations worldwide, significantly expanding VSE’s MRO network and creating centers of excellence that improve customer proximity, turnaround times, aircraft-on-ground (AOG) response capabilities, and supply chain resilience.
The acquisition supports VSE’s strategy of focusing on high-value, high-margin, and differentiated aftermarket services, while maintaining disciplined capital allocation and operational execution.
Leadership Perspectives
John Cuomo, President and Chief Executive Officer of VSE Corporation, described the acquisition as a defining milestone for the Company.
“This acquisition represents a pivotal moment for VSE and a major milestone in our strategy to build a scaled, differentiated, and higher-margin aviation aftermarket platform,” Cuomo said. “We have long admired PAG and view it as an exceptional strategic fit within the VSE portfolio.”
Cuomo highlighted the breadth of capabilities PAG brings to the combined organization.
“PAG adds a differentiated parts and services model, highly complementary technical capabilities, a best-in-class sales organization, a scaled global MRO footprint, and deep expertise across commercial, business and general aviation, rotorcraft, and defense end markets,” he said. “This transformational transaction is expected to significantly expand our scale, increase our proprietary solutions content, and further strengthen our position as a mission-critical partner to aviation operators worldwide.”
Cuomo emphasized the value creation potential of the transaction.
“Together, we expect to deliver meaningful value for our customers, suppliers, employees, and shareholders through enhanced growth, greater diversification, and near-term margin expansion,” he concluded.
David Mast, Chief Executive Officer of Precision Aviation Group, expressed enthusiasm about joining VSE.
“We have built PAG’s reputation on customer responsiveness, expansive technical capabilities, and dependable support for operators around the world,” Mast said. “Joining VSE represents an exciting next chapter for our company. VSE shares our commitment to technical excellence, operational discipline, and world-class customer service.”
Mast added that the combination would accelerate growth opportunities.
“By combining our platforms, we can broaden our capabilities, strengthen our global reach, and accelerate long-term growth for the benefit of our customers, employees, and partners,” he said.
GenNx360 Capital Partners, PAG’s current owner, also expressed strong support for the transaction.
We are incredibly proud of the platform we have built at PAG and believe VSE is the ideal strategic partner to support its next phase of growth,” said Pratik Rajeevan, Principal at GenNx360. “Our meaningful equity rollover reflects our conviction in PAG’s momentum and in VSE’s ability to scale the platform, enhance capabilities, and create even greater value for customers.
Ron Blaylock, Founder and Managing Partner of GenNx360 Capital Partners, echoed those sentiments, citing confidence in the long-term strategic fit.
PAG’s Business Segments
Precision Aviation Group supports the global aviation aftermarket through four core strategic business units:
Component Services
PAG provides system and component repair and overhaul services across a wide range of aircraft systems, including hydraulics, pneumatics, starter generators, wheels and brakes, electrical systems, fuel accessories, batteries, instruments, and landing gear. These services support commercial, business and general aviation, military fixed-wing, and rotorcraft platforms.
Engine Services
The engine services business delivers component, accessory, engine, and auxiliary power unit (APU) testing and overhaul for turbine-powered aircraft. PAG serves customers across commercial airlines, cargo operators, business aviation, rotorcraft fleets, engine lessors, original equipment manufacturers, and defense end markets.
Avionics Services
PAG offers repair and overhaul solutions for flight-critical electronic and electromechanical systems, including displays, sensors, navigation systems, communications equipment, radar systems, and flight and engine control systems across both fixed-wing and rotorcraft platforms.
Proprietary Solutions
PAG’s proprietary solutions business provides Designated Engineering Representative (DER) repairs, reverse-engineering alternatives, and low-rate in-house manufacturing of structural parts, circuit boards, and subassemblies. These capabilities enhance customer value by reducing downtime, extending component life, and lowering total ownership costs.
Strategic Rationale and Value Creation
The acquisition is underpinned by several compelling strategic and financial drivers:
Transformational Scale and Global Reach
The combined company will operate approximately 60 locations worldwide, creating an industry-leading MRO network with enhanced global coverage and improved customer responsiveness.
Structural Revenue and Margin Expansion
The increased proportion of proprietary parts and repair content is expected to support margin expansion. With integration and synergy initiatives, VSE anticipates a path toward exceeding a 20% consolidated adjusted EBITDA margin over the next several years.
Synergy Opportunities
VSE expects to realize more than $15 million of annualized synergies over the coming years, driven by cross-selling opportunities, insourcing of repairs, procurement savings, operational efficiencies, network optimization, and working capital improvements.
Expanded Aviation Aftermarket Portfolio
The transaction creates a comprehensive aviation aftermarket platform encompassing component and engine MRO, avionics, accessories, wheels and brakes, used serviceable material exchanges, and engineered proprietary repairs.
Enhanced End-Market Diversification
The combined company increases exposure across commercial, cargo, business and general aviation, rotorcraft, engine lessors, OEMs, and defense markets, improving resilience across economic and aviation cycles.
Transaction Terms and Financing
Under the terms of the definitive agreement, VSE will acquire PAG for approximately $2.025 billion in upfront consideration, subject to customary working capital adjustments. The consideration consists of $1.75 billion in cash and approximately $275 million in equity issued to GenNx360, subject to registration rights and a customary lock-up period that will expire in three equal tranches at six, 12, and 18 months following closing.
The agreement also includes up to $125 million in additional contingent earnout consideration, payable in cash or equity at VSE’s discretion, based on PAG’s adjusted EBITDA performance in 2026.
Including full anticipated run-rate synergies, the upfront consideration represents approximately 13.5 times PAG’s expected adjusted EBITDA for the year ended December 31, 2025.
The cash portion of the transaction will be supported by a fully committed bridge financing facility. The acquisition is expected to close in the second quarter of 2026, subject to regulatory approvals and customary closing conditions.
VSE also provided preliminary, unaudited financial results for the fourth quarter and full year ended December 31, 2025. Revenue for the fourth quarter is estimated to range between approximately $290 million and $304 million, with operating income of approximately $27 million to $34 million and adjusted EBITDA of approximately $45 million to $53 million.
For the full year 2025, VSE expects revenue of approximately $1.101 billion to $1.115 billion, operating income of approximately $84 million to $91 million, and adjusted EBITDA of approximately $176 million to $184 million.
The Company expects sequential improvement in free cash flow during the fourth quarter, resulting in positive free cash flow for the full year 2025.
VSE plans to provide full fourth-quarter and full-year 2025 financial results, along with its fiscal 2026 outlook, in a comprehensive disclosure next month.
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