SCHEDULE: LKCM Proposes Buyout of Distribution Solutions Group

LKCM Headwater Investments and affiliates have submitted a preliminary, non-binding proposal to acquire all outstanding shares of Distribution Solutions Group, Inc. not currently owned by them.

Summary

• LKCM Headwater Investments, LLC, on behalf of its affiliates and related parties, submitted a preliminary, non-binding proposal to the Board of Directors of Distribution Solutions Group, Inc. on March 14, 2026.
• The proposal aims to acquire all outstanding shares of Common Stock of the Issuer not currently owned by LKCM Headwater Investments, LLC and its affiliates.
• The Reporting Persons collectively beneficially own 36,357,588 shares, representing approximately 78.7% of the outstanding Common Stock.
• This ownership percentage is based on information obtained from the Issuer's Form 10-K for the year ended December 31, 2025.
• The Reporting Persons intend to engage in discussions with various stakeholders, including shareholders, officers, and directors, regarding the proposal and potential transactions.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive development for shareholders, as it signals a potential liquidity event and a floor for the stock price, though the lack of a disclosed offer price introduces uncertainty.

Positives

• The proposal could offer a liquidity event for existing shareholders not affiliated with LKCM.
• A potential acquisition by a major shareholder group (LKCM) could signal confidence in the company's underlying value.

Negatives

• The proposal is preliminary and non-binding, meaning there is no guarantee it will lead to a definitive transaction.
• The offer price is not disclosed in this filing, making it impossible to assess its fairness to minority shareholders at this stage.
• The significant existing ownership (78.7%) by the proposing group could limit the negotiating leverage of the independent directors and minority shareholders.

Risks

• The preliminary proposal may not be accepted by the Board of Directors or minority shareholders.
• Discussions regarding the proposal may not lead to a definitive agreement or a completed transaction.
• The transaction, if completed, could result in the delisting of the Issuer's Common Stock, removing public trading access.
• The Reporting Persons explicitly reserve the right to withdraw or modify the proposal at any time without prior notice.

Future Outlook

The Reporting Persons anticipate engaging in discussions with various stakeholders of Distribution Solutions Group, Inc. regarding the preliminary acquisition proposal. They explicitly reserve the right to take further action, review, reconsider their position, or implement other plans concerning the potential transaction.

Management Comments

• "LKCM Headwater Investments, LLC, on behalf of its affiliates and related parties, submitted a proposal to the Board of Directors of the Issuer regarding a preliminary, non-binding proposal to acquire all of the outstanding shares of Common Stock of the Issuer not currently owned by LKCM Headwater Investments, LLC and its affiliates and related parties."
• "The Reporting Persons expect to engage in discussions and other efforts with one or more shareholders, officers or directors of the Issuer, including their representatives or advisors or other third parties, regarding the Proposal and the potential transactions contemplated therein."
• "The Reporting Persons reserve their right, based on all relevant factors and subject to applicable law, at any time and from time to time, all without prior notice to the Issuer or otherwise, to take further action with respect to the Proposal or otherwise review or reconsider their position or take other action."

Industry Context

StockSavvy.ai notes that such "take-private" proposals from significant existing shareholders are common in mature industries or for companies where the public market valuation may not fully reflect intrinsic value, allowing the controlling shareholder to consolidate ownership and potentially pursue long-term strategies away from public market scrutiny. This move could also be a response to perceived undervaluation or a desire for greater operational flexibility.

Comparison to Industry Standards

• The proposal from a group holding 78.7% of outstanding shares is a strong indicator of intent to take the company private, a common strategy for private equity firms or large institutional investors seeking full control.
• Similar situations have been observed with companies like Dell Technologies (Michael Dell's take-private bid) or various smaller cap companies where a dominant shareholder seeks to unlock value without public market pressures.
• The lack of a disclosed offer price makes a direct comparison to recent take-private premiums difficult at this stage, but typically, such offers include a premium over the pre-announcement trading price to entice minority shareholders.

Stakeholder Impact

• Shareholders: Potential for a liquidity event and a premium for their shares if the acquisition proceeds. Uncertainty regarding the offer price and the outcome of negotiations.
• Management/Employees: Potential changes in corporate strategy, leadership, or operational structure if the company is taken private.

Next Steps

• Engage in discussions with shareholders, officers, directors, and other third parties regarding the proposal.
• The Board of Directors of Distribution Solutions Group, Inc. will need to evaluate the preliminary, non-binding proposal.
• LKCM Headwater Investments, LLC and its affiliates may take further action, review, reconsider their position, or formulate other plans regarding the potential transaction.

Key Dates

Recommendation

The preliminary, non-binding acquisition proposal from a major shareholder group (LKCM, owning 78.7%) introduces significant uncertainty but also potential upside. While the lack of a disclosed offer price prevents a definitive valuation, the proposal itself suggests a potential floor for the stock price and a possible premium for minority shareholders. Investors should hold to await further details on the offer price and the Board's response, as the situation is highly fluid and could lead to a significant price movement.

Keywords

Distribution Solutions Group, DSG, LKCM Headwater Investments, Schedule 13D, Acquisition Proposal, Common Stock, Beneficial Ownership, Takeover Bid, SEC Filing, Corporate Action