DSG and its operating companies acquired businesses during 2024, 2023 and 2022. The acquisitions were accounted for under ASC 805, the acquisition method of accounting. For each acquisition, the allocation of consideration exchanged to the assets acquired and liabilities assumed was based on estimated acquisition-date fair values. The final valuations will be completed within the one-year measurement period following the respective acquisition date, and any adjustments will be recorded in the period in which the adjustments are determined.

On November 18, 2024, DSG acquired the assets of ConRes Test Equipment, (“ConRes TE” and the “ConRes TE Transaction”), for a purchase price of approximately $17.0 million. These assets were acquired to expand TestEquity’s test equipment offerings and value-add service capabilities in all of our end markets. The results of operations from the additional assets acquired from ConRes TE are included within the TestEquity reportable segment. The acquisition was funded using

DSG’s cash on hand and its revolving credit facility. This acquisition was accounted for as an asset acquisition as substantially all of the fair value of the assets being acquired was concentrated in property, plant and equipment.


	ConRes TE
(in thousands)	November 18, 2024 Acquisition Date

Inventory	$	789

Property, plant and equipment	16,211
Right of use assets	414






Lease liabilities	(414)


Total purchase consideration exchanged, net of cash acquired	$	17,000
Cash consideration	$	15,725
Deferred consideration(1)	1,275
Total purchase consideration exchanged, net of cash acquired	$	17,000

On October 30, 2024, DSG acquired all of the issued and outstanding capital stock of Tech-Component Resources Pte LTD (“TCR” and the “TCR Transaction”) for a purchase price of approximately $5.9 million, net of cash acquired of $1.9 million. TCR is a distributor of fasteners, mechanical components, and other industrial products in Southeast Asia. TCR was acquired to provide us with a strategic foothold in this growing region. The results of operations of TCR are included within

The following table summarizes the preliminary allocation of consideration exchanged to the estimated fair values of assets acquired and liabilities assumed, including the allocation to other intangible assets acquired:


	Tech-Component Resources Pte Ltd
(in thousands)	October 30, 2024 Acquisition Date
Accounts receivable	$	923
Inventory	793
Other current assets	526
Property, plant and equipment	17
Right of use assets	5
Other intangible assets:
Customer relationships	2,250
Trade names	1,000
Deferred tax liability, net of deferred tax asset	(641)

Accounts payable	(295)
Lease liabilities	(5)
Accrued expenses and other liabilities	(65)
Goodwill	1,372
Total purchase consideration exchanged, net of cash acquired	$	5,880
Cash consideration	$	4,925
Deferred consideration(1)	955
Total purchase consideration exchanged, net of cash acquired	$	5,880

Certain estimated values for the TCR Transaction, including working capital and other liability adjustments, right of use assets, the valuation of intangibles and property, plant and equipment and income taxes are not yet finalized, and the preliminary purchase price allocation is subject to change as the Company completes its analysis of the fair value at the date of acquisition.

The customer relationships and trade names intangible assets have estimated useful lives of ten years. Goodwill generated from the TCR Transaction is not deductible for tax purposes and is primarily attributable to the benefits we expect to derive from expected synergies, including expanded product and service offerings and cross-selling opportunities.

On August 14, 2024, DSG acquired all of the issued and outstanding capital stock of Source Atlantic Limited (“Source Atlantic” and the “Source Atlantic Transaction”) for a purchase price of approximately $103.1 million, net of cash acquired of $4.4 million. Source Atlantic, headquartered in Saint John, New Brunswick, Canada, is a wholesale distributor of industrial MRO supplies, safety products, fasteners, and related value-add services for the Canadian MRO market. Source Atlantic has 24 branch locations across Canada with a heavy focus in Eastern Canada. Source Atlantic was acquired to expand DSG’s operating footprint in the Canadian market. The results of operations of Source Atlantic are included within the Canada Branch Division reportable segment. The acquisition was funded with borrowings under the Company’s Amended Credit Agreement. Refer to Note 9 – Debt for information about the Amended Credit Agreement.


	Source Atlantic
(in thousands)	August 14, 2024 Acquisition Date		Measurement Period Adjustments		Adjusted Total
Accounts receivable(1)	$	33,679	$	—	$	33,679
Inventory	28,427		—		28,427
Other current assets	1,846		—		1,846
Property, plant and equipment	21,217		(22)		21,195
Right of use assets	6,780		—		6,780
Other intangible assets:
Customer relationships	11,035		1,242		12,277
Trade names	10,012		804		10,816
Deferred tax liability, net of deferred tax asset	(10,314)		(448)		(10,762)

Accounts payable	(17,857)		—		(17,857)
Lease liabilities	(6,780)		—		(6,780)
Accrued expenses and other liabilities	(5,422)		—		(5,422)
Goodwill	30,518		(1,576)		28,942
Total purchase consideration exchanged, net of cash acquired	$	103,141	$	—	$	103,141
Cash consideration	$	98,756	$	—	$	98,756
Deferred consideration(2)	4,385		—		4,385
Total purchase consideration exchanged, net of cash acquired	$	103,141	$	—	$	103,141

(1) Accounts receivable had an estimated fair value of $33.7 million and a gross contractual value of $34.3 million. The difference represents the Company’s best estimate of the contractual cash flows that will not be collected.

Certain estimated values for the Source Atlantic Transaction, including working capital and other liability adjustments, right of use assets, the valuation of intangibles and property, plant and equipment and income taxes are not yet finalized, and the preliminary purchase price allocation is subject to change as the Company completes its analysis of the fair value at the date of acquisition. Following the initial fair value measurement, the Company updated the purchase price allocation for Source Atlantic primarily related to the ongoing review of the opening balance sheet and revised certain assumptions used in estimating the fair value. The adjustments resulted in a $2.0 million increase to customer relationships and trade names and a $1.6 million decrease to goodwill.

The customer relationships and trade names intangible assets have estimated useful lives of 17 years and 8 years, respectively. Goodwill generated from the Source Atlantic Transaction is not deductible for tax purposes and is primarily attributable to the benefits we expect to derive from expected synergies, including expanded product and service offerings and cross-selling opportunities.

On May 1, 2024, DSG acquired all of the issued and outstanding capital stock of S&S Automotive Inc. (“S&S Automotive” and the “S&S Automotive Transaction”), with a purchase price of approximately $80.1 million, net of cash acquired of $0.7 million. S&S Automotive is a distributor of automotive, industrial, and safety supplies primarily to the automotive dealership market based near Chicago in Woodridge, Illinois. S&S Automotive was acquired to expand Lawson’s services and products to the automotive end market. The results of operations of S&S Automotive are included within the Lawson reportable segment. The acquisition was funded using DSG’s cash on hand and its revolving credit facility.


	S&S Automotive
(in thousands)	May 1, 2024 Acquisition Date		Measurement Period Adjustments		Adjusted Total
Accounts receivable	$	4,100	$	—	$	4,100
Inventory	7,100		(203)		6,897
Other current assets	306		—		306
Property, plant and equipment	2,351		(223)		2,128
Right of use assets	7,581		—		7,581
Other intangible assets:
Customer relationships	30,200		(6,700)		23,500
Trade names	12,200		(300)		11,900

Other assets	35		3		38
Accounts payable	(1,120)		—		(1,120)
Lease liabilities	(7,604)		—		(7,604)
Accrued expenses and other liabilities	(1,989)		—		(1,989)
Goodwill	26,892		7,423		34,315
Total purchase consideration exchanged, net of cash acquired	$	80,052	$	—	$	80,052
Cash consideration	$	78,659	$	—	$	78,659
Deferred consideration(1)	1,393		—		1,393
Total purchase consideration exchanged, net of cash acquired	$	80,052	$	—	$	80,052

Certain estimated values for the S&S Automotive Transaction, including working capital and other liability adjustments, right of use assets, the valuation of intangibles and property, plant and equipment and income taxes are not yet finalized, and the preliminary purchase price allocation is subject to change as the Company completes its analysis of the fair value at the date of acquisition. Following the initial fair value measurement, the Company updated the purchase price allocation for S&S Automotive primarily related to the ongoing review of the opening balance sheet and revised certain assumptions used in estimating the fair value. The adjustments resulted in a $7.0 million decrease to customer relationships and trade names and a $7.4 million increase to goodwill.

The customer relationships and trade names intangible assets have estimated useful lives of 17 years and 8 years, respectively. As a result of the S&S Automotive Transaction, the Company recorded tax deductible goodwill of $34.3 million in 2024 that may result in a tax benefit in future periods and is primarily attributable to the benefits we expect to derive from expected synergies, including expanded product and service offerings and cross-selling opportunities.

On January 19, 2024, DSG acquired the assets of Safety Supply Illinois LLC, conducting business as Emergent Safety Supply (“ESS” and the “ESS Transaction”), with a purchase price of $9.9 million. ESS is a national distributor of safety products based near Chicago in Batavia, Illinois. ESS was acquired to expand Lawson’s safety product category. The results of operations of ESS are included within the Lawson reportable segment. The acquisition was funded using DSG’s cash on hand.


	Emergent Safety Supply
(in thousands)	January 19, 2024 Acquisition Date		Measurement Period Adjustments		Adjusted Total
Accounts receivable	$	1,363	$	—	$	1,363
Inventory	1,399		—		1,399
Other current assets	10		—		10
Property, plant and equipment	228		—		228
Right of use assets	550		—		550
Other intangible assets:
Customer relationships	2,700		100		2,800
Trade names	1,400		—		1,400

Other assets	11		—		11
Accounts payable	(205)		—		(205)
Lease liabilities	(550)		—		(550)
Accrued expenses and other liabilities	(25)		11		(14)
Goodwill	2,973		(111)		2,862
Total purchase consideration exchanged, net of cash acquired	$	9,854	$	—	$	9,854
Cash consideration	$	8,904	$	—	$	8,904
Deferred consideration(1)	950		—		950
Total purchase consideration exchanged, net of cash acquired	$	9,854	$	—	$	9,854

Following the initial fair value measurement, the Company updated the purchase price allocation for ESS primarily related to the ongoing review of the opening balance sheet and revised certain assumptions used in estimating the fair value. The adjustments resulted in a $0.1 million increase to customer relationships and a $0.1 million decrease to goodwill. The accounting for the ESS Transaction was completed during the fourth quarter of 2024.

The customer relationships and trade names intangible assets have estimated useful lives of 16 years and 8 years, respectively. As a result of the ESS Transaction, the Company recorded tax deductible goodwill of $2.9 million in 2024 that may result in a tax benefit in future periods and is primarily attributable to the benefits we expect to derive from expected synergies, including expanded product and service offerings and cross-selling opportunities.

On June 8, 2023, DSG acquired all of the issued and outstanding capital stock of HIS Company, Inc., a Texas corporation (“Hisco” and the “Hisco Transaction”), a distributor of specialty products serving industrial technology applications, pursuant to a Stock Purchase Agreement dated March 30, 2023 (the “Hisco Purchase Agreement”). In connection with this transaction, DSG combined the operations of TestEquity and Hisco, further expanding the product and service offerings at TestEquity, as well as all of our operating businesses under DSG. The results of operations of Hisco are included within the TestEquity reportable segment.

The total purchase consideration exchanged for the Hisco Transaction was $267.2 million, net of cash acquired of $12.2 million, with a potential additional earn-out payment subject to Hisco achieving certain performance targets. Refer to Note 8 – Earnout Liabilities for additional information on the earn-out. Under the Hisco Purchase Agreement, DSG became obligated to pay $37.5 million in cash or DSG common stock in retention bonuses to certain Hisco employees that remain employed with Hisco or its affiliates for at least twelve months after the closing of the Hisco Transaction. Pursuant to the Hisco Purchase Agreement, the Company paid $1.8 million of the retention bonuses in 2023 and $34.6 million in 2024. The remaining balance of $1.1 million will be paid in 2025. Compensation expense is recorded over the service period for the

retention bonuses as a component of Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss). Compensation expense inclusive of payroll taxes was $16.3 million for the year ended December 31, 2024 and $22.8 million for the year ended December 31, 2023.

DSG funded the Hisco Transaction with borrowings under its Amended Credit Agreement and proceeds raised from the Rights Offering. Refer to Note 9 – Debt for information about the Amended Credit Agreement and Note 11 – Stockholders’ Equity for details on the Rights Offering.

The Hisco Purchase Agreement allowed certain eligible Hisco employees to invest all or a portion of their respective closing payment in DSG common stock at $22.50 per share, up to an aggregate value of DSG common stock issued to such eligible Hisco employees of $25.0 million. During 2023, the Company issued 144,608 shares of DSG common stock to the eligible Hisco employees and received approximately $3.3 million. During 2023, approximately $0.4 million was recorded as compensation expense for the discount between the prevailing market price of the DSG common stock on the date of purchase and the purchase price of $22.50 per share as a component of Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss).

The following table summarizes the allocation of consideration exchanged to the estimated fair values of assets acquired and liabilities assumed, including the allocation to other intangible assets acquired:


	Hisco
(in thousands)	June 8, 2023 Acquisition Date		Measurement Period Adjustments		Adjusted Total
Accounts receivable(1)	$	66,792	$	(2,269)	$	64,523
Inventory	61,300		(645)		60,655
Other current assets	3,858		350		4,208
Property, plant and equipment	48,326		—		48,326
Right of use assets	21,102		1,188		22,290
Other intangible assets:
Customer relationships	41,800		(1,800)		40,000
Trade names	25,600		(300)		25,300

Deferred tax liability, net of deferred tax asset	(2,544)		81		(2,463)
Other assets	2,495		—		2,495
Accounts payable	(16,689)		—		(16,689)
Lease liabilities	(22,372)		293		(22,079)
Accrued expenses and other liabilities	(8,961)		(289)		(9,250)

Goodwill	49,718		122		49,840
Total purchase consideration exchanged, net of cash acquired	$	270,425	$	(3,269)	$	267,156
Cash consideration	$	252,007	$	—	$	252,007
Deferred consideration(2)	12,418		2,631		15,049
Contingent consideration	6,000		(5,900)		100
Total purchase consideration exchanged, net of cash acquired	$	270,425	$	(3,269)	$	267,156

(1) Accounts receivable had an estimated fair value of $64.5 million and a gross contractual value of $66.8 million. The difference represents the Company’s best estimate of the contractual cash flows that will not be collected.

Following the initial fair value measurement, the Company updated the purchase price allocation for Hisco primarily related to the ongoing review of the opening balance sheet and contractual working capital adjustments and revised certain assumptions used in estimating the fair value of the contingent consideration. The adjustments to these balances resulted in a $0.1 million increase to goodwill and a $3.3 million decrease to the total purchase consideration, net of cash acquired. The accounting for the Hisco Transaction was completed during the second quarter of 2024.

The customer relationships and trade names intangible assets have estimated useful lives of 12 years and 8 years, respectively. As a result of the Hisco Transaction, the Company recorded tax deductible goodwill of $41.4 million in 2023 that may result in a tax benefit in future periods and is primarily attributable to the benefits we expect to derive from expected synergies, including expanded product and service offerings and cross-selling opportunities.

On April 1, 2022, the Mergers were completed via all-stock merger transactions. Pursuant to the Merger Agreements, DSG issued an aggregate of 20.6 million shares of DSG common stock to the former owners of TestEquity and Gexpro Services. On March 20, 2023, an additional 3.4 million shares of DSG common stock were issued. Refer to Note 1 – Nature of Operations and Basis of Presentation for further information regarding the Mergers.

The Mergers were accounted for as a reverse merger under the acquisition method of accounting for business combinations, whereby TestEquity and Gexpro Services were identified as the accounting acquirers and were treated as a combined entity for financial reporting purposes, and DSG was identified as the accounting acquiree. Accordingly, under the acquisition method of accounting, the purchase price was allocated to DSG's tangible and identifiable intangible assets acquired and liabilities assumed, based on their estimated acquisition-date fair values. These estimates were determined through established and generally accepted valuation techniques.



(in thousands, except share data)	April 1, 2022
Number of DSG common shares	18,240,334
DSG common stock closing price per share on March 31, 2022	$	19.27
Fair value of shares exchanged	$	351,491

Other consideration(1)	1,910

Total consideration exchanged	$	353,401

Due to the publicly traded nature of shares of DSG common stock, the equity issuance of shares of DSG common stock based on this value was considered to be a more reliable measurement of the fair market value of the transaction compared to the equity interests of the accounting acquirer.

During the year ended December 31, 2022, TestEquity acquired Interworld Highway, LLC, National Test Equipment, and Instrumex, and Gexpro Services acquired Resolux ApS ("Resolux") and Frontier Technologies Brewton, LLC and Frontier Engineering and Manufacturing Technologies, Inc. ("Frontier"). The consideration exchanged for these acquired businesses included various combinations of cash and sellers' notes.


(in thousands)	Interworld Highway, LLC		Resolux		Frontier		National Test Equipment		Instrumex
Acquisition date	April 29, 2022		January 3, 2022		March 31, 2022		June 1, 2022		December 1, 2022		Total















Cash consideration	$	54,690	$	30,755	$	25,674	$	6,023	$	1,818	$	118,960
Seller's notes	—		—		—		1,169		—		1,169
Deferred consideration	—		—		—		—		474		474
Total purchase consideration exchanged, net of cash acquired	$	54,690	$	30,755	$	25,674	$	7,192	$	2,292	$	120,603

The consideration for the Frontier acquisition includes a potential earn-out payment of up to $3.0 million based upon the achievement of certain milestones and relative thresholds during the earn out measurement period which ends on December 31, 2024. Refer to Note 8 – Earnout Liabilities for additional information on the earn-out.

The following table presents estimated unaudited pro forma consolidated financial information for DSG as if the acquisitions disclosed above occurred on January 1, 2023 for the acquisition completed during 2024, January 1, 2022 for the acquisitions completed during 2023 and January 1, 2021 for the acquisitions completed during 2022. The unaudited pro forma information reflects adjustments including amortization on acquired intangible assets, interest expense, and the related tax effects. This information is presented for informational purposes only and is not necessarily indicative of future results or the results that would have occurred had the acquisitions been completed on the date indicated.

The following table presents actual results attributable to our acquisitions that were included in the consolidated financial statements for the years ended December 31, 2024, 2023 and 2022. The results for these acquisitions are only included subsequent to their respective acquisition dates provided above.