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By Sam Boughedda
Investing.com — Shares of Lawson Products Inc (NASDAQ:LAWS) rose almost 20% Wednesday after the company revealed it will be combining TestEquity and Gexpro Services, two companies owned by Lawson's biggest shareholder.
The two businesses are portfolio companies of LKCM Headwater Investments, the private investment-arm of Luther King Capital Management Corp. LKCM Headwater currently owns approximately 48% of Lawson's outstanding shares.
The all-stock transaction is expected to close in the second quarter of 2022.
"This combination transforms each of our highly complementary businesses, creates a greater level of scale, enables accelerated growth, and expands our competitive advantage,” said Michael DeCata, president and CEO of Lawson.
"This combination will provide all three companies with a more complete offering of products, services, and capabilities to enhance the value proposition for current and future customers," added DeCata.
Once the deal is completed, Luther King will own approximately 75% of the combined company. In addition, the combined company is expected to achieve more than $1 billion in annual revenue.