Distribution Solutions Group announced Oct. 13 an agreement to acquire GradeEight Holdings — the parent of MRO distributors Winzer Corporation and FastServ Supply. GradeEight generates approximately $110 million in annual sales.
A purchase price was not disclosed.
The deal is expected to close in the fourth quarter of 2026, subject to customary conditions. DSG plans to fund it with existing cash and availability under its amended credit agreement and expects it to improve adjusted EBITDA margins.
Two Approaches to Local MRO Service
Winzer’s assortment spans fasteners, hydraulics and pneumatics, electrical products, cutting tools, chemicals, safety supplies, abrasives and automotive maintenance products. Its customer applications range from vehicle and fleet repair to industrial equipment maintenance, construction, agriculture and oil and gas operations. Automotive offerings include body hardware, clamps, shop supplies and specialty repair items, while industrial offerings include hydraulic fittings, hoses and fluid power components.
FastServ provides a complementary storefront model focused on local industrial supply and inventory support. Its product categories include fasteners, hydraulics and pneumatics, electrical supplies, cutting tools, chemicals, abrasives, safety supplies and vehicle maintenance products. The business also works with customers to develop on-site MRO programs aimed at improving product availability and reducing stockouts and downtime.
GradeEight CEO Cody Patterson said joining DSG and working alongside Lawson Products would provide “expanded resources, product categories, and operational capabilities that will benefit our customers and supplier partners.”
Fort Worth, TX-based DSG formed in 2022 through the combination of Lawson Products, Gexpro Services and TestEquity, serving MRO, original equipment manufacturer and industrial technology markets.
DSG’s Take-Private Financing Advances
The acquisition announcement follows DSG’s proposed $700 million senior notes offering announced Oct. 5 to support its pending take-private transaction with LKCM Headwater Investments.
On Oct. 7, DSG announced that the offering had been increased to $800 million and priced at a 10% interest rate, with the notes due in 2032. The offering is expected to close Oct. 15, subject to customary conditions.
Issued initially by an LKCM-controlled merger subsidiary, the proceeds would be held in escrow pending conditions that include completion of the merger. Along with an LKCM equity contribution, the financing would fund the share purchase, repay existing debt, cover transaction costs and support general corporate purposes, including future acquisitions.
Under the take-private agreement announced July 16, LKCM affiliates would acquire DSG shares they do not already own for $35 per share in cash. LKCM held approximately 79% of DSG’s stock when the agreement was announced. Completion would make DSG wholly owned by LKCM and its affiliates and remove its shares from Nasdaq.
MDM Analysis
For MRO distributors, the competitive implication is a larger platform backing established local customer relationships. Pairing Winzer’s franchise network with Lawson’s resources could strengthen product availability and cross-selling, raising the competitive bar for independents serving overlapping accounts. Watch how DSG coordinates the businesses, preserves franchisee relationships and converts broader product access into customer growth. The acquisition also shows that DSG’s ownership transition is not pausing expansion. With the take-private notes priced at 10%, delivering the expected margin improvement and maintaining cash generation will matter alongside adding revenue.
Related Posts
-
The investment firm’s private equity business will acquire a controlling interest in the Edmonton-based industrial…
-
Adding the 77-year-old electrical distributor will be Graybar’s third acquisition of 2026 and expands its…
-
The deal expands Turner Supply’s service coverage across Coastal Georgia and South Carolina while adding…