Distribution Solutions Group, Inc. (NASDAQ:DSGR) (“DSG” or the “Company”), a leading specialty distribution firm, has announced that its operating company, TestEquity, has signed an agreement to acquire ConRes Test Equipment (“ConRes TE”), a division of Continental Resources, Inc. (“ConRes”). This carve-out transaction involves the acquisition of a premier test and measurement equipment provider located in Bedford, Massachusetts, near Boston.
“We are excited to welcome a premier suite of products and services along with the talented workforce from ConRes TE,” stated Russ Frazee, President & CEO of TestEquity. “This acquisition aligns with our commitment to enhancing customer relationships by diversifying TestEquity’s test equipment offerings and value-added services across all markets. Importantly, it will enhance our technical capabilities, particularly in used equipment and rental solutions, and expand our calibration and repair services through an ISO 17025 accredited lab in the Eastern U.S., staffed with skilled in-house technicians to enhance our offerings and customer outreach.”
“Emphasizing capital allocation, ConRes TE, like our other acquisitions in 2024, stands out as an effective use of our capital,” added Bryan King, DSG’s Chairman and CEO. “This acquisition resembles a strategic capital investment with high ROI, akin to purchasing a large fleet of used test and measurement equipment. We can immediately integrate ConRes TE’s existing cash flows, strengthen relationships with top-tier national clients, and leverage their Northeast calibration lab and sales resources, creating organic growth opportunities. This margin-accretive acquisition will enhance our ability to serve both existing and new customers, improve asset utilization, and drive higher returns and margins in tandem with TestEquity.”
“We look forward to the opportunity to collaborate with TestEquity,” remarked Jim McCann Jr., President of ConRes Test Equipment. “This acquisition signals 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 positioned to deliver unmatched solutions and services to our current and future customers, fostering innovation and excellence in the test and measurement sector.”
ConRes Test Equipment generates approximately $12 million in annual sales and is anticipated to be immediately accretive to DSG’s adjusted EBITDA margins moving forward. The transaction will be financed through DSG’s existing cash and available credit under its agreement, and is expected to close in the fourth quarter of 2024, pending customary closing conditions. This acquisition is not expected to materially impact DSG’s financial results.
