$145 Million GradeEight Deal Expands Distribution Solutions Group’s Distribution Network
Key Facts
Distribution Solutions Group announced on October 13, 2026, a definitive agreement to acquire GradeEight Holdings for approximately $145 million, in a deal the company said would expand its presence in industrial distribution. Lawson Products, a wholly owned subsidiary of the group, entered into the merger agreement on October 12, according to the group’s filing with the U.S. Securities and Exchange Commission. The available filing had not confirmed closing; when the deal was announced, the company expected it to close during the fourth quarter of 2026, subject to customary closing conditions. The acquisition gives the group a business with annual sales of approximately $110 million, and the group expects the deal to support adjusted EBITDA margin. Chief Executive Jay Bryan King said the complementary capabilities and broad coverage strengthen the group’s platform and its ability to serve customers in key regions.
GradeEight operates through Winzer, founded in 1978, which serves customers in all 50 U.S. states, as well as Puerto Rico, Mexico and Canada. Winzer’s network comprises more than 270 franchisees serving approximately 12,000 customers, giving them access to a range of more than 65,000 product units. Distribution facilities in Texas and Michigan support the business, according to the company statement accompanying its filing. FastServ Supply, operated by GradeEight, is a brick-and-mortar retail chain with 8 locations across Texas and Arkansas. The target serves markets including automotive, construction, manufacturing, transportation and logistics, as well as government, energy and agriculture.
The group estimated GradeEight’s adjusted EBITDA at approximately $15 million for the twelve months ended June 30, 2026, before any cost savings or synergies. The group expected the acquisition to be accretive to adjusted EBITDA margin on a forward-looking basis, but did not provide a specific figure for the expected margin impact in the filing. Through its combined businesses, the group serves more than 200,000 customers and employs approximately 4,300 people. King said the market coverage and established presence of the two target companies strengthen the group’s ability to serve customers in key regions.
The group said when announcing the deal that it would be financed with available cash and capacity under its amended credit agreement. A separate preliminary filing said that if the acquisition is completed before the proceeds from the bond offering are released from escrow, the company expects to fund the purchase price through borrowings under its revolving credit facility and available cash. This places the deal within two financing paths tied to the timing of its completion and the release of the bond proceeds. Closing was expected in the fourth quarter of 2026, after the customary conditions set out in the definitive agreement are met. The available filing did not establish that the deal had closed.
The GradeEight agreement coincides with a separate process to take Distribution Solutions Group private; the group signed a merger agreement for that transaction on July 15, 2026. The filing said its common stock will cease to be listed on Nasdaq if that merger is completed, and that shareholder approval is among the customary conditions cited for it. The GradeEight deal also remains subject to closing conditions, with completion expected in the fourth quarter of 2026. In its second-quarter 2026 results, the group reported revenue of $557.7 million, up 11% year over year, and adjusted EBITDA of $53.9 million, equivalent to a margin of 9.7%. It also estimated third-quarter revenue at $564 million to $572 million, compared with $518 million in the same period of 2025, a projected increase of between 8.9% and 10.4%.
EL7 data showed the group’s DSGR stock closed at $35.01 on October 23, 2026. The price came after the acquisition agreement was announced on October 13, while the company was still pointing to an expected completion in the fourth quarter, not a completed closing. Company data place the deal in the context of its expansion in specialty distribution through Winzer and FastServ Supply. Closing depends on meeting the customary conditions set out in the agreement. The separate deal to take the group private is subject to its own conditions, including shareholder approval.