Distribution Solutions Group Prices $800 Million Senior Notes for Take-Private Merger

Key numbers

Deal value	$800M
Share of market cap	49.3%
Share of annual revenue	40.4%

Key highlights

• Senior notes offering upsized to $800 million from an initial $700 million target
• Notes carry a 10.000% coupon with a maturity date in 2032
• LKCM Headwater to acquire remaining shares of DSGR at $35.00 per share in cash
• Proceeds will also be used to repay existing debt and for general corporate purposes
• The transaction is subject to stockholder approval and an outside closing date of December 31, 2026

What Is the Deal?

Distribution Solutions Group, Inc. (DSGR) is advancing its transition to a private entity through a merger with its affiliate, LKCM Headwater Investments, LLC. Under the terms of the agreement, LKCM Headwater will acquire all shares of DSG common stock it does not already own for $35.00 per share in cash. To facilitate the transaction, a newly formed escrow issuer priced an $800 million offering of senior notes, which was upsized from the original $700 million target due to investor demand. The merger is expected to close following the satisfaction of customary conditions, including the requisite approval of DSG stockholders.

Deal Structure & Terms

• The $800 million in 10.000% senior notes are due 2032 and were issued at par.
• Merger consideration is entirely cash-based at $35.00 per share, representing the share acquisition price.
• Gross proceeds from the debt offering will be held in escrow until the merger is consummated.
• Upon closing, DSG will assume all obligations under the notes as the surviving corporation.
• Financing includes an additional equity contribution from LKCM Headwater into DSG to support the acquisition.

Business Overview

DSG operates as a multi-platform specialty distributor providing high-touch solutions to the maintenance, repair, and operations (MRO), original equipment manufacturer (OEM), and industrial technologies markets. The company consists of three primary business units: Lawson Products, which distributes industrial C-parts; Gexpro Services, a supply chain services provider; and TestEquity, a distributor of electronic test and measurement equipment. This diversified structure allows the company to serve a broad range of industrial customers across North America while executing a long-term strategy of growth through both organic means and targeted acquisitions.

Financial Context

• DSG reported annual revenue of approximately $1.98 billion prior to the private transaction.
• The $800 million note offering represents a significant leverage event compared to the $1.62 billion market capitalization.
• Management has historically targeted a long-term total net leverage ratio between 3.5x and 4.0x.
• The company has been active in M&A throughout 2026, acquiring American Fasteners Corp. and Eastern Valve & Control Specialties Ltd.
• The current Relative Strength Index (RSI) of 72.8 reflects sustained price appreciation leading up to the deal pricing.

Up 0.0% since our story on 8 Oct: $35.07 when we broke it → $35.07 at the close on 13 Oct. Daily closing prices. Source: Yahoo Finance.

Show the prices

14 Sep	$34.79
15 Sep	$34.81
16 Sep	$34.85
17 Sep	$34.84
18 Sep	$34.83
21 Sep	$34.87
22 Sep	$34.96
23 Sep	$34.95
24 Sep	$34.95
25 Sep	$34.96
28 Sep	$35.00
29 Sep	$34.95
30 Sep	$34.90
1 Oct	$34.94
2 Oct	$34.98
5 Oct	$35.02
6 Oct	$35.05
7 Oct	$35.07
8 Oct	$35.07
9 Oct	$35.03
12 Oct	$35.06
13 Oct	$35.07

Distribution Solutions Group, Inc. · financial snapshot

Share price	$35.07
Market cap	$1.6B
Revenue (annual)	$2.0B
P/E (TTM)	184.6×
1-month price change	+1.18%
Sector	IndustrialsIndustrial Distribution

Reference market data from a third-party provider, as of the story. Not a valuation or a recommendation.