Distribution Solutions Broadens Its Industrial Technologies' Focus Via Hisco Deal

Specialty distribution company Distribution Solutions Group Inc DSGR has agreed to acquire HIS Company Inc (Hisco), a specialty products distributor.
Hisco, an employee-owned company, operates in 38 locations across North America.
DSG has agreed to pay $269.1 million at closing, with a potential additional earn-out payment of up to $12.6 million, subject to Hisco achieving certain performance targets.
DSG will also pay $37.5 million in cash or DSG common stock in retention bonuses to certain Hisco employees who remain employed with Hisco or its affiliates for twelve or more months after closing the transaction.
The transaction is expected to close in the second quarter of 2023.
DSG will combine the operations of TestEquity and Hisco, creating a supplier serving the electronics design, production, and repair industries.
Bryan King, CEO and Chairman, said, "We are very excited to announce our plans for this strategic acquisition which we expect to be accretive on an adjusted basis starting in 2023."
For FY22, Hisco generated sales of over $400 million and adjusted EBITDA of approximately $29 million.
Hisco offers customers a range of products, including adhesives, chemicals and tapes, as well as specialty materials such as electrostatic discharge, thermal management materials and static shielding bags.
DSG anticipates funding the deal using a combination of its expanded committed credit facility and approximately $100 million of equity to be raised via rights offering to existing stockholders.
Distribution Solutions held $24.7 million in cash and equivalents as of December 31, 2022.
Price Action: DSGR shares closed higher by 0.95% at $41.23 on Thursday.

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