Distribution Solutions Group to Buy Hisco for Up to $319M - Modern Distribution Management

Distribution Solutions Group to Buy Hisco for Up to $319M

DSG will pay $269 million at closing for Hisco, which was No. 39 on MDM's 2022 Top Industrial Distributors list.

After a relatively quiet 15 months on the distribution M&A front in terms of major deals, Distribution Solutions Group made has major news waves by announcing a landmark deal that involves a fellow MDM Top Distributor.

Chicago-based DSG said March 31 that it has reached an agreement to acquire Hisco, a market leader in the distribution of electrical and industrial supplies based in Houston. 

DSG will pay $269.1 million at closing, with a potential additional payment of up to $12.6 million. DSG will also pay $37.5 million in cash or DSG stock in retention bonuses to certain Hisco employees that remain with Hisco or its affiliates for at least 12 months after closing, which is expected to happen in 2023’s second quarter.

DSG noted that for its fiscal year ended Oct. 31, Hisco had sales in excess of $400 million and adjusted EBITDA of about $29 million.

DSG said it will combine the operations of its TestEquity unit with Hisco to create one of the largest distributors serving the electronics design, production and repair industries.

MDM PREMIUM:A Year After its Formation, A Deep Dive on Distribution Solutions Group (published March 22)

The deal announcement comes a day shy of one year after Lawson Products announced its merger with fellow distributors TestEquity and GexPro Services, and the trio was rebranded as Distribution Solutions Group one month later.

Lawson Products was No. 34 on MDM’s 2022 Top Industrial Distributors list on account of its $418 million in fiscal 2021 sales, while Hisco was No. 39 with $337 million.

“We are very excited to announce our plans for this strategic acquisition which we expect to be accretive on an adjusted basis starting in 2023,” DSG CEO and Chairman Bryan King said in a news release. “Hisco is a strong business with niche market leadership positions, a strong growth and return profile and an outstanding management team that we believe will thrive as part of DSG. The combination of TestEquity and Hisco will take a ‘best-of-both approach in terms of people, capabilities and strategies.”

Employee-owned Hisco has 38 North America locations, which includes its Precision Converting facilities and Adhesives Materials Group, as well as subsidiaries HiscoMex in Mexico and HiscoCan in Canada. It was founded in the 1940s as Houston Industrial Supply Company, and incorporated as Hisco in 1971. 

Today, Hisco’s product portfolio includes adhesives, chemicals and tapes and specialty materials such as electrostatic discharge, thermal management materials and static shielding bags. The company also offers vendor-managed inventory and RFID programs with specialized warehousing for chemical management, logistics services and cold storage.

“While our industrial technologies focus will benefit most from this combination, we are also excited about how Hisco is expected to expand DSG’s commercial opportunities and durability, enhancing our organic growth rates and providing further scale to the overall DSG platform,” King added.

“This transaction is the result of decades of hard work on the behalf of our employee-owners,” said Bob Dill, Hisco CEO “It’s also a recognition of Hisco’s deep industry relationships, innovative customer-centric solutions, and comprehensive capabilities that Hisco has developed over the course of its history. Looking ahead, the combination of TestEquity and Hisco will allow the combined business to build on our complementary capabilities and further enhance the value that Hisco, TestEquity and the DSG family of companies provide to its customers and partners.”

Related Posts

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.