Distribution Solutions Group Inc (DSGR) News & EventsDSGRDistribution Solutions Group Inc

Distribution Solutions Group Acquires GradeEight Holdings

Distribution Solutions Group announced a definitive agreement to acquire GradeEight Holdings, a multi-brand MRO distribution platform utilizing a national network of franchisees under Winzer, and retail-facing storefronts through FastServ Supply located in Texas and Arkansas. Founded in 1978, Winzer is a principal operating company of GradeEight Holdings, LLC. Through its MRO distribution model, Winzer serves customers across all 50 states, Puerto Rico, Mexico, and Canada, supported by distribution facilities in Texas and Michigan. GradeEight Holdings generates approximately $110M in annual sales and is expected to be 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 amended credit agreement and is expected to close in the Q4, subject to customary closing conditions.

Distribution Solutions Plans to Offer $700M Senior Notes

Distribution Solutions Group announced that Eclipse Acquisitions Merger Sub, a newly formed corporation controlled by LKCM Headwater Investments, an affiliate of the Company, plans to offer $700M aggregate principal amount of Senior Notes due 2032, subject to market and other conditions. The Notes will initially be issued by the Escrow Issuer. The gross proceeds from the sale of the Notes are expected to be placed into an escrow account pending the satisfaction of certain conditions, including, but not limited to, the substantially concurrent consummation of the previously announced merger, pursuant to which affiliates of LKCM Headwater will acquire all of the outstanding shares of DSG's common stock not already owned by LKCM Headwater and its affiliates for $35.00 per share in cash and the Escrow Issuer will merge with and into DSG, with DSG continuing as the surviving corporation, at which point DSG will assume all of the Escrow Issuer's rights and obligations under the Notes and DSG's subsidiaries that are obligors under DSG's existing credit agreement will become guarantors of the Notes. The Merger is subject to customary closing conditions, including obtaining the requisite approval of DSG's stockholders. There can be no assurance that the conditions to the Merger will be satisfied or that the Merger will be consummated. Upon their release from escrow, the gross proceeds from the Offering, together with proceeds from an equity contribution from LKCM Headwater into DSG are expected to be used to fund the payment of the Share Acquisition Consideration to consummate the Merger, repay a portion of DSG's outstanding indebtedness under its existing credit agreement, (iii) pay the fees and expenses of the Offering, the Merger and other transactions related thereto and (iv) for general corporate purposes, including to finance future acquisitions.

Distribution Solutions Group Acquires American Fasteners

Distribution Solutions Group announced the acquisition of American Fasteners, a South Florida distributor of fasteners, tools, construction supplies and other industrial products. The company said, "The acquisition strengthens DSG's MRO business by expanding its customer base and presence in the attractive South Florida market while providing additional reach into export markets throughout Latin America and the Caribbean. Founded in 1981, American Fasteners has built a strong reputation for exceptional customer service and deep product expertise. The company distributes a broad range of industrial products, including fasteners, power tools, anchors, cutting tools, adhesives, abrasives and sealants, primarily serving construction and related end markets through three locations in South Florida." American Fasteners, with annual revenues of approximately $39M, is expected to be accretive to the DSG EBITDA margin profile. The acquisition was funded through the Company's existing cash balances and available capacity under its amended credit agreement.