Distribution Solutions Group’s Operating Company, TestEquity, Enters into Agreement for Strategic Acquisition
Distribution Solutions Group's operating company, TestEquity, has signed an agreement to acquire ConRes Test Equipment, a division of Continental Resources, in a carve-out transaction. This strategic acquisition aims to expand TestEquity's product line and geographic presence. Key points include:
1. ConRes TE generates approximately $12 million in annual sales and is expected to be immediately accretive to DSG's adjusted EBITDA margins.
2. The acquisition will broaden TestEquity's technical expertise, focusing on used equipment, rental solutions, and expanded calibration-repair capabilities.
3. It includes an ISO 17025 accredited lab in the Eastern U.S., enhancing TestEquity's service offerings.
4. The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions.
5. Funding will come from DSG's existing cash and credit agreement availability.
La società operativa del Distribution Solutions Group, TestEquity, ha firmato un accordo per acquisire ConRes Test Equipment, una divisione di Continental Resources, in una transazione di carve-out. Questa acquisizione strategica mira ad ampliare la linea di prodotti e la presenza geografica di TestEquity. I punti chiave includono:
1. ConRes TE genera circa 12 milioni di dollari di vendite annuali ed è prevista per essere immediatamente positiva per i margini EBITDA rettificati di DSG.
2. L'acquisizione allargherà l'expertise tecnica di TestEquity, concentrandosi su attrezzature usate, soluzioni di noleggio e capacità ampliate di calibrazione e riparazione.
3. Include un laboratorio accreditato ISO 17025 negli Stati Uniti orientali, migliorando l'offerta di servizi di TestEquity.
4. La transazione dovrebbe concludersi nel quarto trimestre del 2024, soggetta a condizioni di chiusura consuete.
5. Il finanziamento proverrà dal contante esistente di DSG e dalla disponibilità dell'accordo di credito.
La compañía operativa del Distribution Solutions Group, TestEquity, ha firmado un acuerdo para adquirir ConRes Test Equipment, una división de Continental Resources, en una transacción de carve-out. Esta adquisición estratégica tiene como objetivo expandir la línea de productos y la presencia geográfica de TestEquity. Los puntos clave incluyen:
1. ConRes TE genera aproximadamente 12 millones de dólares en ventas anuales y se espera que sea inmediatamente beneficioso para los márgenes EBITDA ajustados de DSG.
2. La adquisición ampliará la experiencia técnica de TestEquity, centrándose en equipos usados, soluciones de alquiler y capacidades ampliadas de calibración y reparación.
3. Incluye un laboratorio acreditado ISO 17025 en el este de EE. UU., mejorando las ofertas de servicios de TestEquity.
4. Se espera que la transacción se cierre en el cuarto trimestre de 2024, sujeto a condiciones de cierre habituales.
5. La financiación provendrá del efectivo existente de DSG y de la disponibilidad del acuerdo de crédito.
Distribution Solutions Group의 운영 회사인 TestEquity가 Continental Resources의 부서인 ConRes Test Equipment을 인수하기 위해 계약을 체결했습니다. 이번 전략적 인수는 TestEquity의 제품 라인과 지리적 존재를 확장하는 것을 목표로 하고 있습니다. 주요 사항은 다음과 같습니다:
1. ConRes TE는 연간 1,200만 달러의 매출을 올리며 DSG의 조정된 EBITDA 마진에 즉각적으로 긍정적인 영향을 줄 것으로 예상됩니다.
2. 이번 인수는 중고 장비, 렌탈 솔루션 및 확장된 보정-수리 능력에 중점을 두어 TestEquity의 기술 전문성을 넓힐 것입니다.
3. 미국 동부에 ISO 17025 인증 실험실이 포함되어 있어 TestEquity의 서비스 제공을 향상시킵니다.
4. 거래는 2024년 4분기에 종료될 것으로 예상되며, 일반적인 종료 조건이 적용됩니다.
5. 자금 조달은 DSG의 기존 현금과 신용 계약 가용성을 통해 이루어질 것입니다.
La société opérationnelle du Distribution Solutions Group, TestEquity, a signé un accord pour acquérir ConRes Test Equipment, une division de Continental Resources, dans le cadre d'une transaction de carve-out. Cette acquisition stratégique vise à élargir la gamme de produits et la présence géographique de TestEquity. Les points clés comprennent :
1. ConRes TE génère environ 12 millions de dollars de ventes annuelles et devrait être immédiatement bénéfique pour les marges EBITDA ajustées de DSG.
2. L'acquisition élargira l'expertise technique de TestEquity, en se concentrant sur les équipements d'occasion, les solutions de location et les capacités étendues de calibration et de réparation.
3. Elle comprend un laboratoire accrédité ISO 17025 dans l'Est des États-Unis, améliorant ainsi l'offre de services de TestEquity.
4. La transaction devrait être finalisée au quatrième trimestre 2024, sous réserve des conditions de clôture habituelles.
5. Le financement proviendra de la trésorerie existante de DSG et de la disponibilité de l'accord de crédit.
Die Betriebsgesellschaft der Distribution Solutions Group, TestEquity, hat eine Vereinbarung zur Übernahme von ConRes Test Equipment, einer Abteilung von Continental Resources, in einer Carve-out-Transaktion unterzeichnet. Diese strategische Übernahme hat zum Ziel, die Produktpalette und geografische Präsenz von TestEquity zu erweitern. Wichtige Punkte sind:
1. ConRes TE erzielt etwa 12 Millionen US-Dollar an Jahresumsatz und wird voraussichtlich sofort positiv zu den bereinigten EBITDA-Margen von DSG beitragen.
2. Die Übernahme wird die technische Expertise von TestEquity erweitern, mit Fokus auf gebrauchte Geräte, Mietlösungen und erweiterte Kalibrierungs- und Reparaturfähigkeiten.
3. Sie umfasst ein nach ISO 17025 akkreditiertes Labor im östlichen USA, wodurch das Serviceangebot von TestEquity verbessert wird.
4. Die Transaktion wird voraussichtlich im vierten Quartal 2024 abgeschlossen, vorbehaltlich üblicher Abschlussbedingungen.
5. Die Finanzierung erfolgt aus den vorhandenen Mitteln von DSG und der Verfügbarkeit von Kreditverträgen.
- Acquisition expected to be immediately accretive to DSG's adjusted EBITDA margins
- Expansion of TestEquity's product offerings and value-add service capabilities
- Addition of ISO 17025 accredited lab in Eastern U.S., enhancing service capabilities
- Potential for improved asset utilization and higher returns and margins
- Deepening relationships with top-tier national customers
- None.
Insights
This acquisition by TestEquity, a DSG operating company, is a strategic move that expands its product line and geographic reach. The deal to acquire ConRes Test Equipment, with
Key points to consider:
- Expansion of TestEquity's offerings in test equipment and value-add services
- Enhanced technical expertise, particularly in used equipment and rental solutions
- Addition of an ISO 17025 accredited lab in the Eastern U.S., improving service capabilities
- Deepening relationships with top-tier national customers
- Potential for improved asset utilization and higher returns
While the acquisition is not expected to be material for DSG's financial reporting, it aligns with the company's strategy of driving customer intimacy and expanding its market presence. The deal's structure as a carve-out transaction suggests a focused approach to integrating valuable assets without taking on unnecessary liabilities.
This acquisition represents a calculated expansion in the specialty distribution sector, particularly in the test and measurement equipment market. By acquiring ConRes TE, TestEquity is strategically positioning itself to capture a larger share of the growing electronics lifecycle market.
Market implications:
- Increased market share in the Northeast region
- Enhanced competitiveness in the test equipment rental and used equipment segments
- Potential for cross-selling opportunities across DSG's customer base
- Strengthened position in serving high-tech industries like IoT, EV and 5G
The deal aligns with industry trends towards consolidation and the need for comprehensive service offerings. It also reflects the growing importance of test and measurement equipment in emerging technologies. For investors, this move signals DSG's commitment to growth and its ability to identify and integrate valuable assets in a fragmented market.
Product Line and Geographic Expansion Through Carve-out Transaction
“We are thrilled to add a premier suite of products and services along with a talented employee base from ConRes TE,” said Russ Frazee, President & Chief Executive Officer of TestEquity. “This acquisition is consistent with our focus to drive overall customer-intimacy by expanding and diversifying TestEquity’s test equipment offerings and value-add service capabilities in all of our end markets. Notably, it will broaden our technical expertise with a strong focus on used equipment and rental solutions, expanded calibration-repair capabilities, as well as an important ISO 17025 accredited lab in the
"With a strong emphasis on capital allocation, ConRes TE, like each of our 2024 acquisitions, scored very high as an accretive use of our capital. This acquisition mirrors a strategic capital purchase with high ROI, similar to purchasing a large fleet of used test and measurement equipment. We can immediately fold in the existing cash flows of ConRes TE, deepen relationships with top-tier national customers, and benefit from their Northeast calibration lab and sales resources, unlocking organic growth opportunities. This margin accretive acquisition will enhance our ability to support existing and new customers better, improve asset utilization, and drive returns and margins higher at an accelerated basis when combined with TestEquity," concluded
"We are looking forward to the opportunity to partner with TestEquity,” said Jim McCann Jr., President at ConRes Test Equipment. “This acquisition marks an exciting new chapter for both organizations, combining ConRes TE’s extensive expertise and customer-focused approach with TestEquity's robust portfolio and industry leadership. Together, we are poised to deliver unparalleled solutions and services to our existing and future customers, fostering innovation and driving excellence in the test and measurement industry."
ConRes Test Equipment generates approximately
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 TestEquity
TestEquity is the premier partner for electronics design, assembly, and repair solutions empowering the entire electronics lifecycle. As a leading distributor, TestEquity provides the largest and highest quality selection of test and measurement equipment, related industrial assembly supplies, and tool kits from top manufacturer partners, supporting industries such as technology, aerospace, defense, automotive, electronics, education, and medical. TestEquity also designs top-tier environmental test chambers and offers over 300,000 products from more than 1,000 brands, benefiting from the widespread electronification across various industries including IoT, EV, and 5G. For more information, visit www.testequity.com.
About ConRes Test Equipment
ConRes Test Equipment, a privately-owned business founded in 1962, offers rental, lease, and sales options for test equipment across
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241003653158/en/
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
What company is TestEquity acquiring and for how much?
How much annual revenue does ConRes Test Equipment generate?
When is the acquisition of ConRes Test Equipment by TestEquity (DSGR) expected to close?
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What are the main benefits of TestEquity's acquisition of ConRes Test Equipment for DSGR?
