VSE Corp. Secures Licensing Agreement With Honeywell; Lifts 2023 Aviation Segment Guidance

(RTTNews) - VSE Corp. (VSEC) has entered into an asset purchase and perpetual license agreement with Honeywell International Inc. to exclusively manufacture and support certain of Honeywell's fuel control systems on four key engine platforms through its VSE Aviation business. VSE Aviation acquired certain contracts, equipment, and inventory from Honeywell and will utilize the acquired assets and the license to exclusively manufacture, manage aftermarket distribution, and repair more than 340 unique Honeywell fuel control systems. VSE acquired the perpetual license and asset for $105 million. The price also included $12 million of existing inventory.

VSE Corp. said the new agreement expands existing capabilities supporting Honeywell's fuel control systems and associated subcomponents. VSE Aviation will support three in-production engine platforms manufactured by Rolls Royce and Pratt & Whitney Canada, including P&WC PT-6 engine variants.

VSE Corp. increased full year 2023 revenue and adjusted EBITDA guidance for its Aviation segment. The company said Aviation segment full year 2023 revenue guidance is increasing from 25 to 30% to 30 to 35% growth. Aviation segment adjusted EBITDA margin guidance is increasing from 13 to 15% to 14 to 16%.

The company reaffirmed full year 2023 revenue and adjusted EBITDA guidance for its Fleet segment, and maintained second half 2023 free cash flow guidance.