DSGR Announces $700M Senior Notes Offering to Fund $35/Share Going-Private Merger
DSGR sits 84% above its 52-week low of $19.02.
Summary
DSGR's buyer group is raising $700M in Senior Notes plus $140M in equity to fund the $35/share going-private merger, with pro forma leverage rising to 4.5x. The filing also reveals strong estimated Q3 results and a $145M near-term acquisition target.
Updates
· SEC 8-K — The 8-K confirms the upsized $800 million 10.000% senior notes due 2032 offering, expected to close October 15, 2026.
- The Escrow Issuer is named Eclipse Acquisitions Merger Sub, Inc.
- LKCM Headwater Investments, LLC, an affiliate, controls the Escrow Issuer.
- The merger agreement was dated July 15, 2026.
- Merger counterparties include Eclipse Parent Acquisitions, LLC and Eclipse Intermediate Acquisitions, LLC.
- LKCM Headwater affiliates will acquire shares not already owned by them.
- The Escrow Issuer will merge into DSG, which will become a wholly owned subsidiary of Intermediate HoldCo.
- DSG will assume all rights and obligations under the Notes.
- DSG’s subsidiaries under its existing credit agreement will guarantee the Notes.
- Proceeds will repay a portion of DSG’s existing indebtedness.
- Proceeds will pay fees and expenses of the offering, merger, and related transactions.
- Proceeds will be used for general corporate purposes, including future acquisitions.
- The Notes and guarantees are not registered under the Securities Act or other securities laws.
- The Notes are offered only to qualified institutional buyers and non-U.S. persons.
- A Schedule 13E-3 was jointly filed on September 1, 2026, by the Company, LKCM, and affiliates.
- Eclipse Intermediate Acquisitions, LLC is a wholly owned subsidiary of Eclipse Parent Acquisitions, LLC and the direct parent company of the Escrow Issuer.
- Gross proceeds from the notes offering, together with proceeds from an equity contribution from LKCM Headwater into DSG, are expected to fund the $35.00 per share Share Acquisition Consideration.
- The Notes are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A of the Securities Act and to non-U.S. persons outside of the United States in compliance with Regulation S of the Securities Act.
- In connection with the Merger, the Company intends to file with the U.S. Securities and Exchange Commission a definitive proxy statement on Schedule 14A.
· BusinessWire — The senior notes offering was upsized to $800 million at 10.000% due 2032, from the previously announced $700 million, with closing expected October 15, 2026.
Key Events · Financing and Capital Events · DSGR
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$700M Senior Notes Offering Launched
Eclipse Acquisitions Merger Sub, Inc. (controlled by LKCM Headwater) plans to offer $700M of Senior Notes due 2032, with proceeds held in escrow pending merger completion. Notes are offered only to QIBs under Rule 144A and non-U.S. persons under Regulation S.
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Full Financing Structure Revealed
Total sources of $840M: $700M notes + $140M new LKCM equity. Uses: $358M share acquisition consideration, $195M Term Loan A paydown, $50M revolver repayment, $26M fees, $211M cash to balance sheet.
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Pro Forma Leverage Rises to 4.5x
Total net leverage increases from 3.4x to 4.5x pro forma for the transaction, with management targeting a return to 3.5x-4.0x through EBITDA growth and M&A execution.
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Estimated Q3 2026 Results Disclosed
Revenue estimated at $564M-$572M (+8.9%-10.4% YoY) and Adjusted EBITDA at $55.3M-$59.0M (+14.1%-21.8% YoY), with 40-90 bps of margin expansion.
Analysis · DSGR · Trade & Services
The LKCM Headwater-led buyer group is financing the $35.00 per share take-private of DSGR with $700 million in new Senior Notes due 2032 plus $140 million of new LKCM equity. The investor presentation reveals the full capital structure: $358 million to buy out the ~21% minority shareholders, $195 million to pay down Term Loan A, $50 million to repay revolver borrowings, and $211 million of cash to the balance sheet. Pro forma leverage jumps to 4.5x from 3.4x — a meaningful re-leveraging that the company plans to work down to its 3.5x-4.0x target through EBITDA growth and the $650M-$700M M&A pipeline. The presentation also discloses estimated Q3 2026 results showing 9-10% revenue growth and 40-90 bps of margin expansion, plus a near-term $145M acquisition target. This is the first time the financing terms and pro forma capital structure have been quantified.
How filings like this one have moved
In the 30 days to Oct 22, 2026, 36.8% of the 1016 measured filings Wiseek scored 8 moved their stock by 5% or more by the next session's close. The median move was -0.75%. These are measured outcomes after filings of this importance, not a forecast for this one.
Measured one observation per ticker per day, after exclusions. Current figures: Filing Impact Tracker · open dataset
At the time of this filing, DSGR was trading at $34.98 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $1.6B. The 52-week trading range was $19.02 to $35.06. This filing was assessed with neutral market sentiment and an importance score of 8 out of 10.