Hisco Boosted DSG to $1.6B in 2023 Revenue - Modern Distribution Management

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Hisco Boosted DSG to $1.6B in 2023 Revenue

Acquisitions drove nearly all of DSG's growth in 2023, which marked its first full calendar year since forming in early 2022.
Distribution Solutions Group DSG

Distribution Solutions Group reported its 2023 fourth quarter and full-year financial results on March 7, showing the continued gains seen from its major acquisition of Hisco during the year — the first full calendar year since the company was formed through a merger of three distributors during 2022.

Lawson Products, Gexpro Services and TestEquity combined on April 1, 2022 to form DSG, and the company gained a major boost in June 2023 when it acquired industrial supplies distributor Hisco for a purchase price of up to $319 million.

DSG ranked No. 27 on MDM’s 2023 Top Industrial Distributors List, while Hisco ranked 39th.


For the full-year 2023, DSG posted total sales of $1.57 billion, up 36.4% from 2022’s $1.15 billion on a reported basis, and up 23.7% on a pro forma basis post-April 2022. Organic sales grew 2.9% overall vs. 2022, with the rest of the growth driven by acquisitions.

DSG’s 2023 operating profit of $43 million on margin of increased 2.9% vs. 2022, while operating margin of 2.7% fell 90 basis points. Adjusted EBITDA of $157 million jumped 27.6%, with adjusted EBITDA margin of 10.0% up 30 bps.

DSG took a 2023 net loss of $16 million, following a $2 million loss in 2022.

By business unit during 2023:

  • TestEquity revenue of $642 million (47% of DSG total) jumped 63.6%, with nearly all of it driven by acquisitions (Hisco and Instrumex). Full-year adjusted EBITDA was $43 million on margin of 6.7%.
  • Lawson Products pro forma revenue of $469 million (30% of DSG total) grew 9.1% vs. 2022, with all organic growth driven by pricing and expanding/new customer relationships. Full-year adjusted EBITDA was $64 million on 13.6% margin. Lawson ended the year with approximately 900 sales reps.
  • Gexpro Services revenue of $406 million (23% of DSG total) grew 5.3% vs. 2022, despite what DSG noted was a ~50% decline in the technology/semiconductor market. Full-year adjusted EBITDA was $45 million on margin of 11.1%.

Fourth Quarter

DSG posted total 4Q sales of $405 million, up 23.2% year-over-year, primarily driven by Hisco acquisition, while organic revenue fell 6%. DSG said the 4Q organic decline was largely driven by continued softness in the technology end-market, delayed maintenance spend — particularly in the renewable end-market — and delayed capital spending.

DSG had a 4Q operating loss of $289 million, compared to a $13 million operation profit a year earlier, while adjusted operating profit of $18 million fell 12.5% year-over-year. Adjusted EBITDA of $34 million dipped 0.4% year-over-year on margin of 8.4% (10.3% in 4Q22).

DSG took a 4Q net loss of $9 million, compared to a $7 million profit a year earlier.

By business unit during 4Q23:

  • TestEquity revenue of $642 million jumped 44.7%, driven nearly entirely by acquisitions. Operating loss was $8 million, compared to a $4 million profit a year earlier.
  • Lawson Products revenue of $110 million increased 1.6%. Operating profit of $5 million topped the $4 million of a year earlier.
  • Gexpro Services revenue of $93 million fell 6.9% year-over-year. Operating profit of $3.5 million trailed the $4 million of year earlier.

Other Notes

On Jan. 22, DSG announced that Lawson Products had acquired Safety Supply Illinois, which does business as Emergent Safety Supply and is a national distributor of safety and JanSan products based in the Chicago suburb of Batavia, IL. Terms were not disclosed.

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