Specialty distribution company Distribution Solutions Group, Inc. (DSGR) announced Friday that it reached a definitive agreement to acquire HIS Co., Inc., a leading distributor of specialty products serving high growth industrial technology applications.
In connection with this transaction, DSG will combine the operations of TestEquity and His Co., creating one of the largest suppliers serving the electronics design, production, and repair industries.
His Co., an employee-owned company, operates in 38 locations across North America, including its Precision Converting facilities that provide value-added fabrication and its Adhesive Materials Group that provides an array of custom repackaging solutions.
In connection with the transaction, DSG has agreed to pay $269.1 million at closing, with a potential additional earn-out payment of up to $12.6 million, subject to Hisco achieving certain performance targets.
DSG will also pay $37.5 million in cash or DSG common stock in retention bonuses to certain Hisco employees that remain employed with Hisco or its affiliates for twelve or more months after the closing of the transaction.
DSG anticipates funding the transaction using a combination of its expanded committed credit facility and approximately $100 million of equity to be raised in a rights offering to existing stockholders.
The transaction is expected to close in the second quarter of 2023, subject to regulatory and customary closing conditions.
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