FORT WORTH, Texas — Distribution Solutions Group Inc. announced Thursday that its operating company TestEquity signed an agreement to acquire ConRes Test Equipment, a division of Continental Resources Inc., in a carve-out transaction of a leading test and measurement equipment provider based near Boston in Bedford, Massachusetts.
“We are thrilled to add a premier suite of products and services along with a talented employee base from ConRes TE,” said Russ Frazee, president and chief executive officer of TestEquity. “This acquisition is consistent with our focus to drive overall customer-intimacy by expanding and diversifying TestEquity’s test equipment offerings and value-add service capabilities in all of our end markets. Notably, it will broaden our technical expertise with a strong focus on used equipment and rental solutions, expanded calibration-repair capabilities, as well as an important ISO 17025 accredited lab in the Eastern U.S., staffed with in-house technicians able to scale our offerings and customer reach.”
"With a strong emphasis on capital allocation, ConRes TE, like each of our 2024 acquisitions, scored very high as an accretive use of our capital. This acquisition mirrors a strategic capital purchase with high ROI, similar to purchasing a large fleet of used test and measurement equipment. We can immediately fold in the existing cash flows of ConRes TE, deepen relationships with top-tier national customers, and benefit from their Northeast calibration lab and sales resources, unlocking organic growth opportunities. This margin accretive acquisition will enhance our ability to support existing and new customers better, improve asset utilization, and drive returns and margins higher at an accelerated basis when combined with TestEquity," said Bryan King, DSG's chairman and chief executive officer.
"We are looking forward to the opportunity to partner with TestEquity,” said Jim McCann Jr., president at ConRes Test Equipment. “This acquisition marks an exciting new chapter for both organizations, combining ConRes TE’s extensive expertise and customer-focused approach with TestEquity's robust portfolio and industry leadership. Together, we are poised to deliver unparalleled solutions and services to our existing and future customers, fostering innovation and driving excellence in the test and measurement industry."
ConRes Test Equipment generates approximately $12 million in annual sales and is expected to be immediately accretive to DSG’s adjusted EBITDA margins on a go-forward basis. The transaction will be funded through DSG’s existing cash and availability under its credit agreement and is expected to close in the fourth quarter of 2024, subject to customary closing conditions. This acquisition is not expected to be material for financial reporting purposes to DSG’s results.
