Distribution Solutions Completes Acquisition of GradeEight for About $145 Million

Key Facts

Distribution Solutions Group announced on October 26, 2026, that it had completed its acquisition of GradeEight Holdings, which operates through Winzer and FastServ Supply, adding a new distribution network to its group. The deal is valued at about $145 million, subject to adjustments under the merger agreement. The group announced the definitive agreement on October 13, expecting at the time to close it during the fourth quarter of 2026, subject to customary conditions. The acquisition, which was still pending when first announced, has now been completed. The company said the deal was funded with cash on hand and available capacity under its credit agreement.

GradeEight's annual sales are estimated at about $110 million, according to the group's description when it announced the agreement. Distribution Solutions said the acquisition is expected to enhance adjusted EBITDA margin on a go-forward basis, but did not specify the expected amount of improvement. This places the disclosed sales figure alongside the company's expectations for the deal's effect on margin, without a disclosed figure to measure that impact. According to the October 12 filing, the agreement was not conditioned on financing being secured or obtained. Lawson Products, the group's subsidiary, had expected to use borrowings and cash on hand to complete the purchase.

The group's existing revolving credit facility has $400 million of available capacity, according to its October 12 filing. At the closing, the group said the transaction was financed with cash on hand and available capacity under its credit agreement. The earlier filing links that capacity to Lawson's plan to borrow alongside using cash on hand, while confirming that the agreement contains no financing condition. As for the acquired business, Winzer was founded in 1978 and serves customers in all 50 U.S. states, as well as Puerto Rico, Mexico and Canada. At the time of the announcement, its network was described as comprising more than 270 franchisees serving about 12,000 customers, with a portfolio of more than 65,000 product units.

GradeEight also includes FastServ Supply, a brick-and-mortar retail chain with 8 locations in Texas and Arkansas. The acquired group's products include fasteners, electrical supplies, chemicals, shop and automotive supplies, and safety products, as well as cutting tools, abrasives, hydraulic systems and janitorial supplies. In its closing announcement, Distribution Solutions said GradeEight has about 190 employees and 270 franchisees serving customers across the United States. The parent group serves more than 200,000 customers across its businesses and employs about 4,300 people. Chairman and Chief Executive Officer Brian King said that "its complementary capabilities, broad market coverage and established presence enhance the group's platform and our ability to serve customers in key regions."

The deal follows a year in which Distribution Solutions recorded revenue of $1.98 billion in 2025, up 9.8% year over year, while organic daily sales increased 3.6%. But adjusted EBITDA was $175.2 million, or 8.9% of revenue, compared with $175.3 million and 9.7% in 2024. In the second quarter of 2026, revenue rose 11.0% to $557.7 million, with organic sales growth of 10.2%. Adjusted EBITDA for the quarter was $53.9 million, equivalent to 9.7% of sales, the same percentage recorded in the year-earlier quarter. The expected margin enhancement from the acquisition comes against the backdrop of these results, with the company specifying no numerical effect for the deal.

The deal coincides with a separate merger agreement the group signed on July 15, 2026, that would take it private and end the listing of its common stock on Nasdaq if completed. The filing said that agreement is subject to customary conditions, including shareholder approval, but does not specify its status as of October 27. On financing, the group reported in its 2025 results that available liquidity was $469 million at year-end, after expanding the capacity of its revolving credit facility to $400 million. King said at the time that the company was beginning to see order build and improved weekly sales momentum as it headed into 2026. That statement remains earlier context, while the announcement of the GradeEight acquisition's completion provides no new timetable or specified next step.