VSE awarded $750M in distribution pacts for 1Q24, to open Hamburg facility

VSE Corporation announced that its VSE Aviation segment has been awarded 6 new distribution agreements with several manufacturers for a combined value of approximately $750M over the term of these agreements. The agreements are expected to begin in the first quarter of 2024, with contract terms ranging between one and 15 years in duration. VSE Aviation also announced today to open a 45,000 square foot distribution facility in Hamburg, Germany. This new facility will open in the first quarter of 2023 and serve as the distribution center of excellence supporting Europe, the Middle East, and Africa. This investment positions VSE Aviation to expand the global coverage and support for its commercial and business and general aviation distribution aftermarket product lines, including the tire, tube, and battery product lines associated with the Desser Aerospace acquisition…These agreements are collectively expected to contribute approximately $25 to $30M of new revenue in 2024, scaling during a twelve-month transition period, with revenue increasing to more than $50M in 2025. Working capital requirements to support initial investments are expected to be approximately $30M beginning in 2024. These agreements are not anticipated to have any impact on the fourth quarter 2023 financial results.