(RTTNews) – Distribution Solutions Group, Inc. (DSGR), on Thursday announced that it has agreed to be acquired by affiliates of investment firm LKCM Headwater Investments, LLC for $35.00 per share in cash.
In pre-market activity on Nasdaq, shares of Distribution solutions were up 25.04 percent, changing hands at $34.36, after closing Wednesday’s regular session 0.40 percent lower.
LKCM Headwater and its affiliates currently own approximately 79% of DSG’s outstanding common stock. Under the agreement, a newly formed entity controlled by LKCM Headwater will buy all remaining shares it does not already own.
The $35.00 per share price is $5.50 higher than LKCM Headwater’s initial non-binding proposal of $29.50 made on March 14, and represents an 81% premium to DSG’s closing price of $19.31 on March 13, the last trading day before the proposal was disclosed.
Upon completion, DSG will be privately held and 100% owned by LKCM Headwater and its affiliates. The company’s shares will be delisted from Nasdaq.
Bryan King, DSG’s chairman and chief executive, is the managing partner of LKCM Headwater.
After receiving the initial proposal, DSG’s board formed a special committee of independent directors to review the offer. The committee unanimously approved the transaction and recommended it to the board, which also approved it with certain directors recusing themselves.
The deal is not subject to a financing condition. In connection with the merger agreement, DSG amended its credit facility with JPMorgan Chase Bank, N.A. to permit the use of revolving loan proceeds to fund the transaction.
