Fort Worth-based Distribution Solutions Group Acquires Source Atlantic

Distribution Solutions Group, Inc. (NASDAQ: DSGR), a leading specialty distribution company headquartered in Fort Worth, announced this week that its operating company, Lawson Products, has acquired Source Atlantic Limited.

Terms of the deal were not disclosed. The transaction is expected to close in the third quarter of 2024, according to a news release. The transaction was made through Lawson’s subsidiary, Lawson Products Canada Inc.

Source Atlantic, headquartered in Saint John, New Brunswick, Canada, is a leading wholesale distributor of industrial maintenance, repair and operations (MRO) supplies, safety products, fasteners and related value-added services to the Canadian MRO market.

Source Atlantic had sales of approximately C$250 million in its last fiscal year, according to a press release.

“We are excited to partner with Source Atlantic to expand DSG’s operational footprint in the Canadian market,” said Bryan King, DSG president and CEO, in a statement. “We are honored to continue the company’s successful legacy spanning more than 157 years, dating back to 1867, and to continue its 80-year history of continuous stewardship by the Irving family.

“Combining Source Atlantic’s operations in Eastern Canada with Bolt Supply’s presence in the Western Canadian region makes us a leading MRO player in the Canadian market, further strengthening DSG’s presence in North America, enabling us to increase our value-added capabilities.”

Lawson and Lawson Canada offer vendor-managed inventory, online purchasing and customer support services in all 50 states, Puerto Rico, Canada, Mexico and the Caribbean.

The purchase will be paid for using a mix of DSG’s available cash and funds from a credit line. According to a press release, the purchase is expected to be immediately accretive to DSG’s adjusted earnings per share. However, the acquisition is not expected to be material to DSG’s financial reporting results.

“We are excited to join Distribution Solutions Group to provide best-in-class service and offerings to the Canadian MRO market,” said Steve Drummond, President of Source Atlantic. “We are pleased that DSG has recognized the value of the platform we have built with Source Atlantic and look forward to growing as a combined company across Canada. Our employees, customers and supplier partners will benefit from the combination of Source Atlantic and DSG.”

King said: “We look forward to leveraging the combined operations with the Source Atlantic team and expanding our offering to their well-established client base, as well as leveraging their capabilities in specialist services, which account for approximately a quarter of their revenue.”