On June 21, MRO product and service distributor MSC Industrial Supply Co. announced that its Board of Directors has approved — and will recommend to shareholders for approval — the reclassification of the company’s equity structure, including the elimination of the company’s Class B Common Stock, which is held by the Jacobson/Gershwind family and entities affiliated with the family.
The decision is based on the recommendation of a special committee composed entirely of independent directors, MSC said in a news release.
Under the terms of the reclassification agreement, each outstanding share of the company’s high-voting Class B shares (10 votes per share) will be exchanged for 1.225 Class A shares (1 vote per share) in stock. The agreement follows the Jacobson/Gershwind family’s previously disclosed proposal to exchange each Class B share for 1.35 Class A shares, according to the news release.
On MDM’s 2023 Top Distributors Lists, MSC ranks No. 13 for industrial distributors, No. 6 for MRO distributors and No. 5 for fastener distributors.
MSC said it expects a number of beneficial voting and governance changes as a result of the reclassification, including:
- Limitations on family voting.
- Enhancements to governance.
- Further enhancing Board independence.
- Active capital allocation.