Distribution Solutions Group’s Operating Company, Gexpro Services, Enters into Agreement for Small, Highly Strategic Acquisition
Distribution Solutions Group's operating company, Gexpro Services, has signed an agreement to acquire Tech-Component Resources Pte (TCR), a Southeast Asian distributor of fasteners and industrial products. This strategic acquisition aims to establish Gexpro Services' presence in Southeast Asia, expanding its geographic footprint and enhancing its ability to serve existing customers and grow market share. TCR, headquartered in Singapore with a second location in Malaysia, will provide Gexpro Services with opportunities to expand in critical end markets such as technology, semiconductor, industrial, and manufacturing.
The acquisition is expected to close in the fourth quarter of 2024, subject to customary closing conditions. It will be funded through DSG's existing cash and is not expected to be material for financial reporting purposes to DSG's results. This move aligns with DSG's growth objectives and is anticipated to drive margin accretion while exceeding net return on invested capital targets.
La società operativa di Distribution Solutions Group, Gexpro Services, ha firmato un accordo per acquisire Tech-Component Resources Pte (TCR), un distributore di fissaggi e prodotti industriali del Sud-est asiatico. Questa acquisizione strategica mira a stabilire la presenza di Gexpro Services nel Sud-est asiatico, espandendo la sua presenza geografica e migliorando la sua capacità di servire i clienti esistenti e aumentare la quota di mercato. TCR, con sede a Singapore e una seconda sede in Malesia, offrirà a Gexpro Services opportunità di espansione in mercati finali critici come tecnologia, semiconduttori, industria e produzione.
Si prevede che l'acquisizione si chiuda nel quarto trimestre del 2024, soggetta alle consuete condizioni di chiusura. Sarà finanziata tramite la liquidità esistente di DSG e non dovrebbe avere un impatto significativo sulla reportistica finanziaria dei risultati di DSG. Questa mossa è in linea con gli obiettivi di crescita di DSG e si prevede che favorisca l'accrescimento del margine, superando gli obiettivi di rendimento sul capitale investito.
La empresa operativa de Distribution Solutions Group, Gexpro Services, ha firmado un acuerdo para adquirir Tech-Component Resources Pte (TCR), un distribuidor de sujetadores y productos industriales en el sudeste asiático. Esta adquisición estratégica tiene como objetivo establecer la presencia de Gexpro Services en el sudeste asiático, expandiendo su huella geográfica y mejorando su capacidad para atender a los clientes existentes y aumentar la cuota de mercado. TCR, con sede en Singapur y una segunda ubicación en Malasia, brindará a Gexpro Services oportunidades de expansión en mercados finales críticos como tecnología, semiconductores, industria y manufactura.
Se espera que la adquisición se cierre en el cuarto trimestre de 2024, sujeta a las condiciones de cierre habituales. Se financiará a través de la liquidez existente de DSG y no se espera que tenga un impacto material en la presentación de informes financieros de los resultados de DSG. Este movimiento está alineado con los objetivos de crecimiento de DSG y se anticipa que impulsará la acumulación de márgenes al superar los objetivos de rendimiento de capital invertido.
Distribution Solutions Group의 운영 회사인 Gexpro Services는 Tech-Component Resources Pte (TCR)를 인수하기 위한 계약을 체결했습니다. TCR은 동남아시아의 패스너 및 산업 제품 유통업체입니다. 이번 전략적 인수는 Gexpro Services의 동남아시아 내 존재감을 확립하고, 지리적 범위를 확장하며, 기존 고객에게 서비스를 제공하고 시장 점유율을 증가시키는 능력을 향상시키는 것을 목표로 하고 있습니다. 싱가포르에 본사를 두고 있으며 말레이시아에 두 번째 지사를 가진 TCR은 기술, 반도체, 산업, 제조와 같은 주요 최종 시장에서 Gexpro Services의 확장 기회를 제공할 것입니다.
인수는 2024년 4분기에 종료될 것으로 예상되며, 통상적인 종료 조건에 따라 진행됩니다. DSG의 기존 현금을 통해 자금이 조달되며, DSG의 재무 보고서에 중대한 영향을 미치지 않을 것으로 예상됩니다. 이 움직임은 DSG의 성장 목표에 부합하며, 투자 자본에서의 순수 수익률 목표를 초과하면서 마진 증가를 촉진할 것으로 예상됩니다.
La société opérationnelle de Distribution Solutions Group, Gexpro Services, a signé un accord pour acquérir Tech-Component Resources Pte (TCR), un distributeur de fixations et de produits industriels en Asie du Sud-Est. Cette acquisition stratégique vise à établir la présence de Gexpro Services en Asie du Sud-Est, en élargissant son empreinte géographique et en améliorant sa capacité à servir les clients existants et à accroître sa part de marché. TCR, dont le siège est à Singapour avec un deuxième site en Malaisie, offrira à Gexpro Services des opportunités d'expansion dans des marchés finaux critiques tels que la technologie, les semi-conducteurs, l'industrie et la fabrication.
L'acquisition devrait se concrétiser au quatrième trimestre de 2024, sous réserve des conditions habituelles de clôture. Elle sera financée par la trésorerie existante de DSG et ne devrait pas avoir d'impact significatif sur les rapports financiers des résultats de DSG. Cette initiative s'inscrit dans les objectifs de croissance de DSG et devrait favoriser l'accroissement de la marge tout en dépassant les objectifs de rendement net du capital investi.
Das operative Unternehmen der Distribution Solutions Group, Gexpro Services, hat einen Vertrag zum Erwerb von Tech-Component Resources Pte (TCR) unterzeichnet, einem Distributor für Befestigungen und Industrieprodukte in Südostasien. Diese strategische Akquisition zielt darauf ab, die Präsenz von Gexpro Services in Südostasien zu etablieren, die geografische Reichweite zu erweitern und die Fähigkeit zu verbessern, bestehende Kunden zu bedienen und den Marktanteil zu steigern. TCR, mit Hauptsitz in Singapur und einer zweiten Niederlassung in Malaysia, wird Gexpro Services Möglichkeiten bieten, in wichtigen Endmärkten wie Technologie, Halbleitern, Industrie und Fertigung zu expandieren.
Die Akquisition wird voraussichtlich im vierten Quartal 2024 abgeschlossen, vorbehaltlich der üblichen Abschlussbedingungen. Sie wird aus der bestehenden Liquidität von DSG finanziert und dürfte keine wesentlichen Auswirkungen auf die Finanzberichterstattung der Ergebnisse von DSG haben. Diese Maßnahme steht im Einklang mit den Wachstumszielen von DSG und soll die Margensteigerung fördern und die Ziele für die Nettorendite auf investiertes Kapital übertreffen.
- Expansion into Southeast Asian market, potentially increasing revenue and market share
- Opportunity to better serve existing customers and target new ones in the region
- Access to critical end markets including technology, semiconductor, industrial, and manufacturing
- Expected to exceed net return on invested capital targets
- Anticipated to drive margin accretion
- None.
Insights
This acquisition by Gexpro Services, a subsidiary of Distribution Solutions Group (DSG), marks a strategic expansion into Southeast Asia. While described as "small" and not expected to be material to DSG's financial results, it's a significant move for several reasons:
- Establishes a foothold in Southeast Asia, a key growth market
- Enhances service capabilities for existing OEM customers
- Expands market potential in critical sectors like technology, semiconductor and manufacturing
- Aligns with DSG's growth objectives and return on invested capital targets
- Expected to be margin accretive
The deal, funded through existing cash, is set to close in Q4 2024. While financial terms weren't disclosed, the emphasis on meeting net return targets suggests careful consideration of the acquisition's value. For DSG, with a market cap of
This acquisition is a textbook example of strategic supply chain expansion. By acquiring TCR, Gexpro Services gains:
- Immediate presence in Singapore and Malaysia
- Established relationships with local OEMs
- Expertise in fasteners and mechanical components distribution
- Opportunity to introduce Gexpro's broader product range and services
The move allows Gexpro to better serve existing customers with regional operations and tap into new markets. It's particularly noteworthy given the current focus on supply chain resilience and nearshoring. By expanding its global footprint, Gexpro strengthens its ability to support customers' increasingly complex and geographically diverse supply chains. This could lead to increased wallet share from existing clients and attract new customers looking for partners with robust Asian operations.
Expanding into
“We are excited to partner with TCR to establish a beachhead operation for Gexpro Services in Southeast Asia,” said Robert Connors, Chief Executive Officer of Gexpro Services. “This highly strategic acquisition allows Gexpro Services to expand our geographic footprint and pull through products and service capabilities to serve existing customers and continue to grow market share. In addition to better serving existing customers, we have identified new target customers and verticals to expand throughout
“We are thrilled to join Gexpro Services and DSG to accelerate our growth opportunities,” said Koh Kee Hun, General Manager of TCR. “As part of a much larger global business network, TCR customers, suppliers, and employees will benefit from partnering with Gexpro Services and its industry-leading global supply chain solutions. We look forward to having access to Gexpro Services’ unique capabilities and expanding our available product and service offering and geographic reach into a broader distribution network.”
The transaction will be funded through DSG’s existing cash and is expected to close in the fourth quarter of 2024, subject to customary closing conditions. The acquisition is not expected to be material for financial reporting purposes to DSG’s results.
About Distribution Solutions Group, Inc.
Distribution Solutions Group (“DSG”) is a premier multi-platform specialty distribution company providing high touch, value-added distribution solutions to the maintenance, repair & operations (MRO), the original equipment manufacturer (OEM) and the industrial technologies markets. DSG was formed through the strategic combination of Lawson Products, a leader in MRO distribution of C-parts, Gexpro Services, a leading global supply chain services provider to manufacturing customers, and TestEquity, a leader in electronic test & measurement solutions.
Through its collective businesses, DSG is dedicated to helping customers lower their total cost of operation by increasing productivity and efficiency with the right products, expert technical support and fast, reliable delivery to be a one-stop solution provider. DSG serves approximately 190,000 customers in several diverse end markets supported by approximately 4,300 dedicated employees and strong vendor partnerships. DSG ships from strategically located distribution and service centers to customers in
For more information on Distribution Solutions Group, please visit www.distributionsolutionsgroup.com.
About Gexpro Services
Gexpro Services is a world-class global supply chain solutions provider, specializing in the development of mission critical production line management, aftermarket and field installation programs. Gexpro Services provides comprehensive supply chain management solutions, including a full technology suite offering of VMI, kitting, global logistics management, manufacturing localization and import expertise, value engineering and quality assurance. Gexpro Services' end-to-end project management is designed to support manufacturing OEMs with their engineered material specifications, fulfillment, and quality requirements to improve their total cost of ownership. Gexpro Services has manufacturing and supply chain operations in over 31 service center sites across ten countries including key geographies in
About Tech-Component Resources
Tech-Component Resources, a privately-owned business founded in 2004, distributes fasteners, mechanical components, and other industrial products serving OEM customers and applications. The business has evolved over time from a distributor of brass inserts and self-clinching products to being a key partner, supporting manufacturing industries with a wide variety of fasteners, mechanical components and other products/services. TCR supports key manufacturing sectors such as the electronics contract manufacturing, plastic injection moulding and metal stamping sectors, which serve telecommunication, electronics, automotive, medical and construction industries. For more information, visit www.tc-resources.com.
Forward-Looking Statements
This release contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the “safe-harbor” provisions under the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. The Terms "aim," "anticipate," "believe," "contemplates," "continues," "could," "ensure," "estimate," "expect," "forecasts," "if," "intend," "likely," "may," "might," "objective," "outlook," "plan," "positioned," "potential," "predict," "probable," "project," "shall," "should," "strategy," "will," "would," and variations of them and other words and terms of similar meaning and expression (and the negatives of such words and terms) are intended to identify forward-looking statements.
Forward-looking statements can also be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements are based on current expectations and involve inherent risks, uncertainties and assumptions, including factors that could delay, divert or change any of them, and could cause actual outcomes to differ materially from current expectations. DSG can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and DSG cautions readers not to place undue reliance on such statements. DSG undertakes no obligation to release publicly any revisions to forward-looking statements as a result of new information, future events or otherwise. Each forward-looking statement speaks only as of the date on which such statement is made, and DSG undertakes no obligation to update any such statement to reflect events or circumstances arising after such date. Actual results may differ materially from those projected as a result of certain risks and uncertainties. Factors that could cause or contribute to such differences or that might otherwise impact DSG’s business, financial condition and results of operations include the risks that DSG may encounter difficulties integrating the business of DSG with the business of other companies that DSG has combined with or may otherwise combine with and that certain assumptions with respect to such business or transactions could prove to be inaccurate. Certain risks associated with DSG’s business are also discussed from time to time in the reports DSG files with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K or other reports the Company may file from time to time with the Securities and Exchange Commission, which should be reviewed carefully.
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Company:
Distribution Solutions Group, Inc.
Ronald J. Knutson
Executive Vice President, Chief Financial Officer and Treasurer
1-888-611-9888
Investor Relations:
Three Part Advisors, LLC
Steven Hooser / Sandy Martin
214-872-2710 / 214-616-2207
Source: Distribution Solutions Group, Inc.
FAQ
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