Lawson Products, Inc. (NASDAQ: LAWS), a leading distributor of products and services to the MRO marketplace, and LKCM Headwater Investments, the private investment arm of Luther King Capital Management Corp., have announced Lawson will combine with two of LKCM’s portfolio companies, TestEquity and Gexpro.
The deal structure will bring the three merging firms under a holding company with the three companies operating independently. The combination is intended to increase the combined reach of the firms into the fragmented OEM/MRO distribution markets and broaden service capabilities. Prior to the deal, Lawson serves 90,000 customers with TE and GP services providing support to over 30,000 and 1,800 customers respectively.
“Through the combination of these three complementary valued-added distribution businesses, we strongly believe the holding company will be well-positioned to leverage its combined leadership, strong balance sheet and stable cash flow generation to drive more transformational value creation for shareholders,” said J. Bryan King, chairman of the board at Lawson.
Cowen served as exclusive financial advisor to the Special Committee. Piper Sandler served as exclusive financial advisor, and provided a fairness opinion, to TestEquity and Gexpro Services. Baird served as financial advisor to LKCM Headwater. Jenner and Block served as counsel to the Special Committee and Lawson, and Mayer Brown served as counsel to TestEquity and Gexpro Services.