Why Aftermarket Distribution & MRO Services Provider VSE's Stock Is Jumping Today?
Portfolio Pulse from Shivani Kumaresan
VSE Corporation has entered into an asset purchase and perpetual license agreement with Honeywell International Inc. VSE acquired the perpetual license and asset for $105 million, which included $12 million of existing inventory. The agreement will allow VSE to exclusively manufacture and support certain of Honeywell's fuel control systems. This is expected to provide long-term, sustainable revenue and an improved mid-term EBITDA margin outlook for VSE Aviation. VSE has increased its Aviation segment FY23 revenue growth outlook from 25% - 30% to 30% - 35%.
October 04, 2023 | 4:31 pm
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POSITIVE IMPACT
VSE Corporation's acquisition of Honeywell's perpetual license and asset is expected to boost its revenue and EBITDA margin outlook.
The acquisition of Honeywell's perpetual license and asset will allow VSE to exclusively manufacture and support certain of Honeywell's fuel control systems. This is expected to provide long-term, sustainable revenue and an improved mid-term EBITDA margin outlook for VSE Aviation.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEUTRAL IMPACT
Honeywell International Inc's asset and perpetual license has been acquired by VSE Corporation.
Honeywell has sold its asset and perpetual license to VSE Corporation. The impact on Honeywell's financials is not clear from the news.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50