Distribution Solutions Group sets Nov. 27 vote on $35-a-share LKCM buyout

What happened

Distribution Solutions Group, Inc. (Nasdaq: DSGR), a Fort Worth, Texas-based distributor of industrial machinery, equipment and supplies, filed a definitive proxy statement on October 28, 2026 asking stockholders to approve its acquisition by an investor group led by LKCM Headwater Investments, LLC.

Under the merger agreement, dated July 15, 2026, each share of DSG common stock not held by the buyer group, in the company's treasury or by stockholders who perfect appraisal rights will convert into the right to receive $35.00 in cash. The company said the price is $5.50 above LKCM Headwater's initial March 14, 2026 proposal of $29.50, and about 81.3% above the $19.31 closing price on March 13, 2026, the last trading day before that initial proposal was publicly disclosed.

A special stockholder meeting is set for November 27, 2026 at 10:00 a.m. Central Time, held online. Shares voted as of the September 30, 2026 record date count. The board, acting on the unanimous recommendation of a special committee of independent directors, recommends a vote in favor. Directors J. Bryan King and M. Bradley Wallace recused themselves from the board vote.

DSG closed at $34.98 on the report date, down 0.11% from the prior close of $35.02, according to the price data.

The buyer and the conflict at the center of the deal

The buyers — Eclipse Parent Acquisitions, LLC, Eclipse Intermediate Acquisitions, LLC and Eclipse Acquisitions Merger Sub, Inc. — were formed by LKCM Headwater, J. Bryan King and their affiliates. King is DSG's chief executive officer, president and chairman, and also managing partner of LKCM Headwater. Luther King Capital Management Corporation and its affiliates, including LKCM Headwater and King, hold about 78.5% of DSG's common stock as of the record date.

The filing describes the transaction as a "going private transaction" under SEC Rule 13e-3 and a "controlling stockholder transaction" under Section 144 of Delaware corporate law. Because King and Wallace are affiliated with the buyer, the board formed a special committee of independent directors, chaired by Lee S. Hillman, to negotiate and evaluate the deal. The committee unanimously found the merger fair to and in the best interests of the company and its disinterested stockholders.

What the votes require

Approval of the merger needs two things, per the filing: a majority of all shares outstanding and entitled to vote, and a majority of the votes cast by "disinterested stockholders" — a group that excludes the affiliated stockholders, board members who were not on the special committee, and company officers. Because the first test is based on total shares outstanding rather than shares actually voted, an unvoted share counts the same as a vote against.

Stockholders also vote on two related proposals: an advisory, non-binding measure on the compensation payable to named executive officers in connection with the merger, and a proposal to adjourn the meeting if there are not enough votes for the merger.

LKCM has signed a voting and support agreement committing the shares it controls to vote in favor. The filing does not state which way any other stockholder intends to vote.

The filing lists no reason beyond the buyer group's offer for why the transaction is happening; it does not describe strategic or financial motivations.

What this means

A proxy statement is the document a public company must send stockholders before a vote. It is filed with the SEC on Schedule 14A; a "DEFM14A" is the definitive — final, as opposed to preliminary — version covering a merger. It obligates the company to lay out the deal terms, the background of negotiations, the board's reasoning and the conflicts of interest involved, so stockholders can make an informed vote.

The deal itself is a merger in which a newly created company — Merger Sub — folds into DSG. DSG survives as the legal entity but becomes a wholly owned subsidiary of Eclipse Intermediate and an indirect subsidiary of Eclipse Parent. In practice, Merger Sub is the legal vehicle for the purchase: it merges into DSG, and each public share converts into cash. That is also why the filing calls the outcome a going-private transaction: once the buyout group owns 100% of the company, DSG's stock will be delisted from Nasdaq and the company will no longer file periodic reports with the SEC.

The $35.00 per share mergers consideration is cash paid per share. It is fixed by the merger agreement, so the price eventually received depends on whether the deal closes, not on day-to-day trading. At $34.98, the market price is slightly below the merger price, a gap that typically reflects the time remaining and the risk the vote or closing conditions fail. The filing does not forecast any outcome.

Appraisal rights are a separate feature of Delaware law. A stockholder who objects can ask a Delaware court to determine the "fair value" of the shares instead of accepting $35.00, provided the stockholder follows the statutory steps and does not vote in favor of the merger. The filing notes that such shares are excluded from the per-share payment.

Next, the proxy will be mailed on or about October 28, 2026, and the special meeting is scheduled for November 27, 2026. If the requisite approvals are obtained and other closing conditions are met, shares convert into the $35.00 cash payment, and Nasdaq listing ends. The filing does not commit to a closing date.