DSG Upsizes Senior Notes to $800M at 10% to Fund $35/Share Buyout
DSGR sits 84% above its 52-week low of $19.02.
Summary
The buyer group financing the $35/share going-private merger has upsized its senior notes offering from $700M to $800M and priced the notes at 10.000% due 2032. The offering is expected to close October 15, 2026, with proceeds held in escrow until the merger closes. The Escrow Issuer is Eclipse Acquisitions Merger Sub, Inc., controlled by LKCM Headwater Investments, LLC, an affiliate. The merger agreement was dated July 15, 2026, with counterparties including Eclipse Parent Acquisitions, LLC and Eclipse Intermediate Acquisitions, LLC. LKCM Headwater affiliates will acquire shares not already owned by them, and 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, and its subsidiaries under its existing credit agreement will guarantee the Notes. Proceeds will repay a portion of DSG’s existing indebtedness, pay fees and expenses of the offering, merger, and related transactions, and be used for general corporate purposes, including future acquisitions. The Notes and guarantees are not registered under the Securities Act or other securities laws and 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. The upsizing signals strong demand for the debt, but the 10% coupon reflects the leverage being added to fund the buyout. This follows the October 5 8-K that first disclosed the $700M offering and $140M equity contribution. The merger remains subject to stockholder approval and customary conditions.
Updated with an SEC 8-K filing · What changed
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.
At the time of this announcement, DSGR was trading at $35.08 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $1.6B. The 52-week trading range was $19.02 to $35.10. This news item was assessed with neutral market sentiment and an importance score of 7 out of 10. Source: BusinessWire.