Distribution Solutions Group has reached a definitive agreement to be acquired by newly formed entities controlled by affiliates of LKCM Headwater Investments for $35.00 per share in cash, the company said on Thursday.
Trading in the company’s shares was paused prior to the public announcement and resumed with the stock moving sharply higher, rising roughly 25% on the day.
Under the terms of the merger agreement, the LKCM Headwater-controlled entities will purchase all remaining outstanding shares of common stock not already held by LKCM Headwater and its affiliates. LKCM Headwater and its affiliates currently own approximately 79% of Distribution Solutions’ outstanding common stock.
The agreed purchase price of $35.00 per share reflects an increase of $5.50 from LKCM Headwater’s earlier non-binding proposal of $29.50 per share, which was presented to the company’s board on March 14, 2026. Compared with the company’s closing share price of $19.31 on March 13, 2026 - the last trading day before LKCM Headwater’s proposal became public - the $35.00 offer represents an approximate 81% premium.
Once the transaction closes, Distribution Solutions will be privately held and entirely controlled by LKCM Headwater and its affiliates, and its common stock will be removed from listing on the Nasdaq exchange.
The board of directors established a special committee composed of disinterested directors to review and negotiate the proposal. That committee unanimously approved the transaction and recommended that the full board approve it.
The closing of the merger remains subject to customary conditions. These include the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, the absence of legal restraints that would prevent completion, and required stockholder approvals. One specific approval condition is that the transaction must receive a majority of votes cast from holders who are not affiliated with LKCM Headwater. The company noted that the merger agreement is not contingent on a financing condition.
The proposed acquisition and the related trading halt and subsequent rebound underscore how a controlling shareholder-led buyout can swiftly move public-market pricing, while the outcome still depends on regulatory review and the support of unaffiliated stockholders.
Market reaction: Shares jumped approximately 25% following the announcement after trading resumed from the halt.
Next steps: Parties will await expiration of the Hart-Scott-Rodino waiting period, any required shareholder votes, and clearance from any potential legal impediments before the deal can close.