Lawson Products Completes Strategic Combination with TestEquity, Gexpro

The transactions will create a specialty distribution platform under a holding company.

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Lawson Products

CHICAGO — Lawson Products Inc. on Friday announced the completion of its strategic combination with TestEquity and Gexpro Services in all-stock merger transactions creating a specialty distribution platform under a holding company structure.

Pursuant to the merger agreements, Lawson issued an aggregate of 10.3 million shares of Lawson common stock to the former owners of TestEquity and Gexpro Services, which are entities affiliated with Luther King Capital Management Corporation and J. Bryan King, the chairman of Lawson Products. An additional 1.7 million shares of Lawson common stock remain potentially issuable to entities affiliated with LKCM and King upon meeting the conditions of certain earn-out provisions within the merger agreements. Entities affiliated with LKCM and King now own shares that represent approximately 75% of the outstanding shares of Lawson common stock.

All Lawson shares outstanding immediately before the mergers continue to remain outstanding after the combination and remain listed for trading on the NASDAQ Global Select Market under the symbol “LAWS."

“We are excited to announce the completion of this strategic combination. We expect the merger of these businesses to generate significant earnings, improved cash flow and incremental value for our shareholders," King said. "The holding company structure will enable the combined companies to leverage best practices, back-office resources and technology across the platform to help drive operating efficiencies and leverage shared solutions. These best-in-class specialty distribution businesses offer high-touch, technical, value-added service delivery models for their customers, which are well-positioned for accretive acquisitions across highly fragmented markets.”

In connection with the closing of the mergers, the company amended and restated its existing credit agreement. Lawson’s amended and restated credit agreement provides five-year facilities comprised of a $200 million senior secured revolving credit facility, a $250 million senior secured initial term loan facility and a $50 million senior secured delayed draw term loan facility for permitted acquisitions through Oct. 1, 2022. The amended and restated credit agreement also permits Lawson to increase the facility by an additional $200 million in the aggregate, subject to, among other things, the receipt of additional commitments and meeting other conditions specified in the amended and restated credit agreement.

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