Bernhard Capital Partners Management, LP agreed to acquire Federal and Defense Segment of VSE Corporation for $100 million on May 1, 2023. The business is anticipated to be sold for a total cash consideration of up to $100 million. This assumes a $50 million cash payment and an earn-out payment of up to $50 million, subject to the achievement of certain milestones. The transaction is expected to close in late 2023 to early 2024 and is subject to customary closing conditions and approvals. The Company currently intends to use the net proceeds from the FDS Transaction to reduce existing borrowings and execute strategic acquisitions. Jones Day acted as legal advisor to VSE Corporation. Jefferies Group LLC acted as financial advisor to VSE Corporation. William Blair acted as the financial advisor to Bernhard Capital Partners. William J. Curtin and Ashlee Sawyer of Hogan Lovells US LLP acted as legal advisor to Bernhard Capital Partners Management, LP.

Bernhard Capital Partners Management, LP cancelled the acquisition of Federal and Defense Segment of VSE Corporation on September 27, 2023. Necessary approvals and closing conditions to effectuate the divestiture are no longer expected to be completed in a reasonable amount of time, for reasons unrelated to VSE or BCP. No party will be required to pay any termination fee as a result of the mutual decision to terminate the agreement, and the parties will each bear their respective costs and expenses. The VSE Federal and Defense segment will remain in discontinued operations as the assets are held for sale.