Distribution Solutions Group, Inc. 8-K

What Happened

• On July 15, 2026 (8-K filed July 16, 2026), Distribution Solutions Group, Inc. (DSG) entered into an Agreement and Plan of Merger under which Eclipse Acquisitions Merger Sub will merge into DSG and DSG will become a wholly owned subsidiary of the buyer, resulting in DSG going private and delisting from Nasdaq.
• Under the Merger Agreement, each outstanding share of DSG common stock (other than shares held by certain affiliates or properly exercised appraisal shares) will be converted into the right to receive $35.00 in cash per share at the Effective Time.
• The buyer group was formed by LKCM Headwater and J. Bryan King (DSG’s CEO and Chairman), and LKCM Headwater affiliates currently beneficially own approximately 79% of DSG’s common stock.

Key Details

• Merger consideration: $35.00 per share in cash.
• Major stockholder/management connection: CEO/chair J. Bryan King is a managing partner of LKCM Headwater; LKCM Headwater and affiliates own ~79% of shares.
• Approvals & timing: Closing requires adoption by a majority of outstanding shares and approval by a majority of disinterested stockholders, HSR clearance, no Material Adverse Effect, and other customary conditions. Outside Date is December 31, 2026 (subject to extension).
• Financing and commitments: Credit Agreement lenders amended facility to allow use of revolver proceeds to finance the Transactions; an equity commitment letter commits up to $125,000,000 from LKCM Headwater Investments IV, L.P.; the Equity Commitment Party also provided a limited guarantee covering, among other things, the reverse termination fee.
• Fees: Termination fee payable by DSG for a superior proposal: $9,264,438. Reverse termination fee payable by Parent in certain breach/failure-to-close scenarios: $22,234,650.
• Treatment of equity awards: Vested RSUs and director RSUs cashed at $35/share; vested options cashed for the in-the-money spread; underwater options canceled with no payment; unvested RSUs converted to cash-settled RSUs subject to original vesting.

Why It Matters

• This is a definitive take-private transaction that would deliver $35 cash per share to public holders (subject to closing and excluded shares), and result in DSG shares being delisted from Nasdaq.
• The buyer group includes the company’s CEO and the company’s largest shareholder group (~79%), which affects the vote dynamics (certain affiliate votes are excluded from the “disinterested” vote). Minority public holders should note the disinterested stockholder approval requirement and available appraisal rights for eligible holders.
• Financing appears supported by a credit amendment and a $125M equity commitment, and the Merger Agreement includes standard protection mechanics (termination and reverse-termination fees) that can affect parties if the deal fails to close. Equity award holders should review the cash-out and cancellation terms for options and RSUs.