Deals

DSG's Lawson Products Agrees To Pay About $145 Million For GradeEight, Parent Of Winzer And FastServ Supply

The MRO distributor would fund the deal with its $400 million revolver and cash, while a take-private merger with its CEO's firm is still pending.

Distribution Solutions Group's Lawson Products subsidiary agreed on October 12 to pay about $145 million for GradeEight Holdings, subject to adjustments, according to an 8-K filed Wednesday. The target generates roughly $110 million in annual sales, and DSG announced the deal in a press release on October 13.

What the 8-K says

Lawson, a wholly owned DSG subsidiary, signed a merger agreement under which a Lawson subsidiary merges into GradeEight, which survives as a Lawson subsidiary. The deal carries no financing condition, and Lawson expects to fund it with borrowings under DSG's existing $400 million revolving credit facility plus available cash.

GradeEight's main operating company is Winzer, which, per the press release, was founded in 1978 and sells maintenance, repair and operations (MRO) supplies through more than 270 franchisees. Those franchisees serve about 12,000 customers and offer over 65,000 products. GradeEight also runs FastServ Supply, a chain of eight stores in Texas and Arkansas, and has about 190 associates.

DSG said GradeEight is expected to add to its adjusted EBITDA margins going forward. Closing is expected in the fourth quarter of 2026.

What it changes

DSG gains a franchise channel and store locations it did not have, with Winzer serving customers in all 50 states, Puerto Rico, Mexico and Canada. CEO J. Bryan King said the company is "excited to invest in tools, products, and other growth opportunities" for franchisees and FastServ locations.

GradeEight CEO Cody Patterson said joining DSG and working with the Lawson Products team gives the business access to "expanded resources, product categories, and operational capabilities."

The purchase lands while DSG is already the subject of another deal. On July 15, 2026, it agreed to a take-private merger with entities tied to LKCM Headwater and King, who is DSG's chairman and CEO and LKCM Headwater's managing partner. LKCM Headwater and its affiliates beneficially own about 78.5% of DSG's common stock.

What to watch

The take-private merger needs stockholder approval before DSG shares are delisted from Nasdaq. DSG intends to file a definitive proxy statement, and a Schedule 13E-3 transaction statement was filed on September 1. The GradeEight closing is the other event to track.

DSG targets a fourth-quarter 2026 close for GradeEight, with the stockholder vote on the LKCM Headwater merger still to be scheduled through the proxy statement.