Distribution Solutions Group is expected to become a privately-owned company under an agreement that would see its majority stakeholder acquire all shares of its common stock.
LKCM Headwater Investments, the private equity firm that currently owns about 79% of DSG’s shares, announced Thursday that it would pay $35 per share to buy out the company’s other shareholders. The firm originally proposed buying those shares for $29.50 per share in March, which would have valued the company at more than $2 billion.
DSG Chairman and CEO J. Bryan King — who is also the president of LKCM Headwater — wrote at the time of the initial offer that the distributor has been constrained by the "pressures, inflexibility and short-term focus and expectations" of operating as a public company.
A special committee formed by DSG to evaluate the March proposal unanimously approved the transaction, the company said, and its board — with “certain directors” recusing themselves — also signed off. The deal must still be approved by a majority of its non-LKCM Headwater shareholders.
Once the deal is closed, the company would be “100% controlled by LKCM Headwater and its affiliates,” and its common stock would no longer be listed on the Nasdaq exchange.
DSG, formed in 2022 through the merger of Lawson Products, TestEquity and GexPro Services, is the no. 16 distributor on ID’s latest Big 50.
