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Fort Worth-based Distribution Solutions Group, Inc. (NASDAQ: DSGR), a premier specialty distribution company, announced this week that its operating company, Lawson Products, acquired Source Atlantic Limited.
Terms of the deal were not disclosed. The transaction is expected to close in the third quarter of 2024, according to a press release. The transaction was made under Lawson’s affiliate, Lawson Products Canada Inc.
Source Atlantic, headquartered in Saint John, New Brunswick, Canada, is an industry-leading wholesale distributor of industrial maintenance, repair, and operation inventory (MRO) supplies, safety products, fasteners, and related value-add services for the Canadian MRO market.
For the most recent fiscal year, Source Atlantic generated sales of approximately $250 million Canadian, according to the press release.
“We’re thrilled to partner with Source Atlantic to expand DSG’s operating footprint in the Canadian market,” said Bryan King, chairman and CEO of DSG, in a statement. “We are honored to carry on the company’s successful legacy of over 157 years, dating back to 1867, and to continue its steady stewardship by the Irving family spanning 80 years.
“Combining Source Atlantic’s Eastern Canadian operation with Bolt Supply’s Western presence positions us as a leading MRO player in the Canadian market, further strengthening DSG’s North American presence for our expanded value-added capabilities.”
Lawson and Lawson Canada offer vendor-managed inventory services, online purchasing, and support customers in all 50 states, Puerto Rico, Canada, Mexico, and the Caribbean.
The purchase will be paid for using a mix of DSG's available cash and funds from its credit line. According to the press release, the purchase is expected to immediately increase DSG's adjusted earnings per share. However, the acquisition is not expected to be material for financial reporting purposes to DSG’s results.
“We are excited to join Distribution Solutions Group to provide best-in-class service and offerings in the Canadian MRO market,” said Steve Drummond, president of Source Atlantic. “We are pleased DSG recognized the value of the platform we have built with Source Atlantic and look forward to growing as a combined company across Canada. Our employees, customers, and vendor partners will all benefit from combining Source Atlantic with DSG.”
Said King: “We look forward to leveraging the combined operations with the Source Atlantic team and expanding our offerings to their well-established customer base and leveraging their specialty services capabilities which represents approximately one-fourth of their revenues.”