Product Line and Geographic Expansion Through
Carve-out Transaction
Distribution Solutions Group, Inc. (NASDAQ:DSGR) ("DSG" or
the "Company"), a premier specialty distribution company, today
announced that its operating company TestEquity signed an agreement
to acquire ConRes Test Equipment, (“ConRes TE”), a division of
Continental Resources, Inc. (“ConRes”), in a carve-out transaction
of this leading test and measurement equipment provider based near
Boston in Bedford, Massachusetts.
“We are thrilled to add a premier suite of products and services
along with a talented employee base from ConRes TE,” said Russ
Frazee, President & Chief Executive Officer of TestEquity.
“This acquisition is consistent with our focus to drive overall
customer-intimacy by expanding and diversifying TestEquity’s test
equipment offerings and value-add service capabilities in all of
our end markets. Notably, it will broaden our technical expertise
with a strong focus on used equipment and rental solutions,
expanded calibration-repair capabilities, as well as an important
ISO 17025 accredited lab in the Eastern U.S., staffed with in-house
technicians able to scale our offerings and customer reach.”
"With a strong emphasis on capital allocation, ConRes TE, like
each of our 2024 acquisitions, scored very high as an accretive use
of our capital. This acquisition mirrors a strategic capital
purchase with high ROI, similar to purchasing a large fleet of used
test and measurement equipment. We can immediately fold in the
existing cash flows of ConRes TE, deepen relationships with
top-tier national customers, and benefit from their Northeast
calibration lab and sales resources, unlocking organic growth
opportunities. This margin accretive acquisition will enhance our
ability to support existing and new customers better, improve asset
utilization, and drive returns and margins higher at an accelerated
basis when combined with TestEquity," concluded Bryan King, DSG's
Chairman and Chief Executive Officer.
"We are looking forward to the opportunity to partner with
TestEquity,” said Jim McCann Jr., President at ConRes Test
Equipment. “This acquisition marks an exciting new chapter for both
organizations, combining ConRes TE’s extensive expertise and
customer-focused approach with TestEquity's robust portfolio and
industry leadership. Together, we are poised to deliver
unparalleled solutions and services to our existing and future
customers, fostering innovation and driving excellence in the test
and measurement industry."
ConRes Test Equipment generates approximately $12 million in
annual sales and is expected to be immediately accretive to DSG’s
adjusted EBITDA margins on a go-forward basis. The transaction will
be funded through DSG’s existing cash and availability under its
credit agreement and is expected to close in the fourth quarter of
2024, subject to customary closing conditions. This acquisition is
not expected to be material for financial reporting purposes to
DSG’s results.
About Distribution Solutions Group,
Inc.
Distribution Solutions Group (“DSG”) is a premier multi-platform
specialty distribution company providing high touch, value-added
distribution solutions to the maintenance, repair & operations
(MRO), the original equipment manufacturer (OEM) and the industrial
technologies markets. DSG was formed through the strategic
combination of Lawson Products, a leader in MRO distribution of
C-parts, Gexpro Services, a leading global supply chain services
provider to manufacturing customers, and TestEquity, a leader in
electronic test & measurement solutions.
Through its collective businesses, DSG is dedicated to helping
customers lower their total cost of operation by increasing
productivity and efficiency with the right products, expert
technical support and fast, reliable delivery to be a one-stop
solution provider. DSG serves approximately 190,000 customers in
several diverse end markets supported by approximately 4,300
dedicated employees and strong vendor partnerships. DSG ships from
strategically located distribution and service centers to customers
in North America, Europe, Asia, South America and the Middle
East.
For more information on Distribution Solutions Group, please
visit www.distributionsolutionsgroup.com.
About TestEquity
TestEquity is the premier partner for electronics design,
assembly, and repair solutions empowering the entire electronics
lifecycle. As a leading distributor, TestEquity provides the
largest and highest quality selection of test and measurement
equipment, related industrial assembly supplies, and tool kits from
top manufacturer partners, supporting industries such as
technology, aerospace, defense, automotive, electronics, education,
and medical. TestEquity also designs top-tier environmental test
chambers and offers over 300,000 products from more than 1,000
brands, benefiting from the widespread electronification across
various industries including IoT, EV, and 5G. For more information,
visit www.testequity.com.
About ConRes Test Equipment
ConRes Test Equipment, a privately-owned business founded in
1962, offers rental, lease, and sales options for test equipment
across North America. Partnering with leading manufacturers, ConRes
Test Equipment provides a wide array of quality test and
measurement equipment solutions, including spectrum/signal
analyzers, network analyzers, oscilloscopes, and other general
purpose test equipment. ConRes Test Equipment delivers its
customers the correct equipment for the right application on time
and calibrated to manufacturer specifications. ConRes Test
Equipment is committed to delivering exceptional value and trusted
services through its extensive product range and expert solutions.
For more information, visit www.conrestestequipment.com.
Forward-Looking Statements
This release contains certain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended, Section 21E of the Securities Exchange Act of 1934, as
amended, and the “safe-harbor” provisions under the Private
Securities Litigation Reform Act of 1995, that involve risks and
uncertainties. The Terms "aim," "anticipate," "believe,"
"contemplates," "continues," "could," "ensure," "estimate,"
"expect," "forecasts," "if," "intend," "likely," "may," "might,"
"objective," "outlook," "plan," "positioned," "potential,"
"predict," "probable," "project," "shall," "should," "strategy,"
"will," "would," and variations of them and other words and terms
of similar meaning and expression (and the negatives of such words
and terms) are intended to identify forward-looking statements.
Forward-looking statements can also be identified by the fact
that they do not relate strictly to historical or current facts.
Such forward-looking statements are based on current expectations
and involve inherent risks, uncertainties and assumptions,
including factors that could delay, divert or change any of them,
and could cause actual outcomes to differ materially from current
expectations. DSG can give no assurance that any goal or plan set
forth in forward-looking statements can be achieved and DSG
cautions readers not to place undue reliance on such statements.
DSG undertakes no obligation to release publicly any revisions to
forward-looking statements as a result of new information, future
events or otherwise. Each forward-looking statement speaks only as
of the date on which such statement is made, and DSG undertakes no
obligation to update any such statement to reflect events or
circumstances arising after such date. Actual results may differ
materially from those projected as a result of certain risks and
uncertainties. Factors that could cause or contribute to such
differences or that might otherwise impact DSG’s business,
financial condition and results of operations include the risks
that DSG may encounter difficulties integrating the business of DSG
with the business of other companies that DSG has combined with or
may otherwise combine with and that certain assumptions with
respect to such business or transactions could prove to be
inaccurate. Certain risks associated with DSG’s business are also
discussed from time to time in the reports DSG files with the
Securities and Exchange Commission, including the Company’s Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K or other reports the Company may file from time
to time with the Securities and Exchange Commission, which should
be reviewed carefully.
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version on businesswire.com: https://www.businesswire.com/news/home/20241003653158/en/
Company: Distribution Solutions Group, Inc. Ronald J.
Knutson Executive Vice President, Chief Financial Officer and
Treasurer 1-888-611-9888
Investor Relations: Three Part Advisors, LLC Steven
Hooser / Sandy Martin 214-872-2710 / 214-616-2207
Distribution Solutions (NASDAQ:DSGR)
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