Four years after its formation as a public company, Distribution Solutions Group could be on the verge of going private.

DSG announced March 16 that it has received an unsolicited, non-binding proposal from LKCM Headwater Investments to acquire the remaining outstanding shares of DSG that LKCM doesn’t already own at a price of $29.50 per share.

LKCM currently owns about 79% of DSG’s shares, and the company has about 46.2 million of shares outstanding. 

Both DSG and LKCM are headquartered in Fort Worth, TX.

DSG Acquires Valve Provider in Newfoundland (March 20)

LKCM’s proposal letter DSG’s board of directors notes that the offer represents a 52.8% premium over DSG’s closing share price of $19.31 on March 13, which would put the proposed offer price at $2.016 billion, representing an 11.5x multiple of DSG’s last 12 months adjusted EBITDA for the year ended Dec. 31.

LKCM expects the proposed transaction could be completed within two to four months once a definitive agreement is reached.

Deal Rationale

“While we remain confident in the potential value creation opportunities within the company, we believe the company’s ability to successfully execute on those opportunities has been significantly constrained by the pressures, inflexibility and short-term focus and expectations inherent in operating the company as a public company,” LKCM said in its letter to DSG’s board.

LKCM added that, by going private, DSG would benefit from:

• “Reduced management distraction” tied to SEC reporting and other public company obligations
• Greater operational flexibility that would enable, among other things, a “harmonization” of multiple ERP systems
• Greater flexibility in implementing and executing organic and inorganic growth strategies
• An aligned ownership structure focused on long-term value creation

DSG said its board of directors will carefully review and evaluate the proposal while consulting with its independent and legal advisors to determine the best course of action.

DSG Snapshot

DSG is an MRO, OEM and industrial technology products distributor formed in April 2022 through a strategic merger of Lawson Products (MRO focus), Gexpro Services (OEM) and TestEquity (industrial technologies). The company posted 2025 revenue of $1.98 billion — up 9.8% annually, with 69% of the increase driven by five acquisitions, while organic sales increased 3.6%.

Other DSG fiscal 2025 info:

• The company ended 2025 with approximately 4,300 employees serving 220,000 customers
• 2025 gross margin of 33.4% fell 60 bps vs. 2024
• 2025 operating profit of $78 million jumped 39.9%, with adjusted operating profit of $141 million down 5.1%
• 2025 net profit of $8 million reversed a $7 million loss in 2024
• 2025 adjusted EBITDA of $175 million on 8.9% margin trailed $175 million/9.7% of 2024

At the end of 4Q25, DSG announced it had amended and expanded its secured credit facility through 2030 to include $700 million ot term debt and a revolving credit arrangement of $400 million — a $225 million increase over the previous existing revolver. The amended facility also includes a $500 million uncommitted accordion feature — up from $300 million previously.

Other Distributors in LKCM’s Portfolio

• LGG Industrial (fluid power & material handling)
• Building Controls & Solutions 
• Applied System Technologies (compressed air aluminum piping systems)
• Golden State Medical Supply
• XMEK ( seals, plastics, gaskets and bearings)
• Flatrock Compression (gas compression parts)
• BearCom (two-way radios)
• Alliance Consumer Group
• MOC Products (aftermarket maintenance fluids & supplies)
• O2COOL (consumer outdoor cooling)
• Quality Magnetite