VSE Enhances Aviation Position With Kellstrom Aerospace Acquisition

VSE Corporation VSEC, a leader in aftermarket distribution and repair services, has completed the acquisition of Kellstrom Aerospace Group, Inc. The transaction strengthens VSEC's position in the commercial aerospace engine aftermarket.This acquisition was valued at around $185 million in cash and 172,414 common shares of VSEC. The purchase was funded through proceeds from a public offering and borrowings under VSEC's existing credit facility.VSE Strengthens Aviation With Kellstrom AcquisitionThis acquisition aligns with VSE’s strategic plan to expand its product and service offerings in the aerospace sector. It presents an opportunity for the company to enhance its position in the growing commercial aerospace aftermarket. The deal strengthens VSE’s original equipment manufacturers (OEM) focused value proposition and supports its efforts to grow distribution and MRO capabilities.Kellstrom Aerospace brings a strong track record of supporting global OEM partners through its engine-focused products and repair services. This expertise, along with its technical advisory capabilities, complements VSE Aviation’s existing business. The integration is expected to create significant value for both customers and suppliers.The company will offer customers and suppliers more comprehensive solutions by combining VSE Aviation and Kellstrom. The strong cultural alignment, combined capabilities and shared focus on the aviation aftermarket will allow VSE to capitalize on emerging growth opportunities.VSEC’s Share Price PerformanceVSEC’s shares have gained 77.9% year to date, outperforming the Zacks Engineering - R and D Services industry’s 16.1% growth. This Zacks Rank #3 (Hold) company has strengthened its position in the aviation aftermarket through the acquisition of Kellstrom. The move enhances VSE's competitiveness, positioning the company for accelerated growth and improved financial performance.Image Source: Zacks Investment ResearchThe Aviation segment now generates more than 70% of VSE’s total revenues. These revenues come from both the commercial and business and general aviation aftermarket. In the third quarter of 2024, global demand in the commercial aerospace aftermarket remained near record levels, driven by high passenger traffic. However, the market has been facing challenges from declining OEM production rates and ongoing supply-chain disruptions, which continue to affect the availability of new aircraft.The business in the general aviation aftermarket has also been performing near historic highs. It has entered a period of stability, differing from previous cycles. Private air travel sentiment remains strong.VSE expects strong demand in the commercial aftermarket to continue into 2025, with near double-digit revenue growth. This growth will be supported by high passenger volumes, OEM production challenges and an aging global fleet. The outlook for the business and general aviation sector is also positive, with low to mid-single-digit growth expected for 2025.Key PicksHere are some better-ranked stocks from the Construction sector.Sterling Infrastructure, Inc. STRL presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.It delivered a trailing four-quarter earnings surprise of 21.5%, on average. Shares of STRL have risen 67.8% in the past six months. The Zacks Consensus Estimate for STRL’s 2024 sales and earnings per share (EPS) implies an increase of 9% and 33.3%, respectively, from the prior-year levels.Louisiana-Pacific Corporation LPX currently flaunts a Zacks Rank of 1. LPX delivered a trailing four-quarter earnings surprise of 30.7%, on average. The stock has gained 28% in the past six months.The Zacks Consensus Estimate for LPX’s 2024 sales and EPS indicates an increase of 12.7% and 72.1%, respectively, from a year ago.MasTec, Inc. MTZ presently sports a Zacks Rank of 1. MTZ delivered a trailing four-quarter earnings surprise of 40.2%, on average. The stock has gained 29.9% in the past six months.The Zacks Consensus Estimate for MTZ’s 2024 sales and EPS indicates an increase of 1.9% and 84.3%, respectively, from a year ago.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Louisiana-Pacific Corporation (LPX): Free Stock Analysis Report Sterling Infrastructure, Inc. (STRL): Free Stock Analysis Report MasTec, Inc. (MTZ): Free Stock Analysis Report VSE Corporation (VSEC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks