Aftermarket services provider VSE (Nasdaq: VSEC) and Bernhard Capital Partners have mutually agreed to cancel an approximately $100 million deal for BCP to acquire VSE’s federal and defense business after both parties fail to secure the necessary approvals and meet other closing conditions in a timely manner.
The mutual decision to cancel the transaction will not result in the payment of any termination fee by any party, VSE said Wednesday.
“While today’s announcement is unexpected, we intend to continue to pursue the divestiture of the Federal and Defense segment to accelerate our growth strategies as a two-segment aftermarket business,” said John Cuomo, president and CEO of VSE.
In May, VSE agreed to divest its federal and defense segment to BCP, a private equity firm focused on the services and infrastructure markets, as part of a move to reposition itself into two businesses, one focused on fleet and aviation distribution and the other on maintenance, repair and overhaul services.
Cuomo noted that VSE has further advanced its “strategic focus on high-growth, higher-margin commercial aftermarket business opportunities” by generating strong earnings and revenue growth in its fleet and aviation segments and acquiring an aerospace distribution and MRO business.
In early July, VSE closed its purchase of global aftermarket components distributor Desser Aerospace for $124 million in cash.