Key insights
- LKCM, the majority owner of DSGR, proposes to take the company private at a premium, but the offer is viewed as opportunistic given recent stock performance and available credit. The deal's likelihood is high due to LKCM's existing ownership and access to capital. The impact on the broader US market is slightly negative, reflecting potential concerns about minority shareholder treatment in similar situations.
I just shared a post on my Substack about a take private proposal from the majority owner. I think it's a super interesting situation. Would appreciate any thoughts or feedback. TLDR below & link in bio
LKCM, the majority owner of DSGR wants to take the company private. The stock was taken behind the woodshed after a suspiciously messy Q4 results. The offer is a 52% premium to the prior day price, but to say its opportunistic is an understatement. The stock traded in a solid range for the last 12 months & the unaffected price is realistically more like ~$29. The CEO is the Founder & Managing Partner of LKCM Capital Group & LKCM Headwater Investments, the private capital investment group of LKCM. They already own ~80% of the company & taking out the remaining minority investors would only require cutting a $263m cheque. Coincidentally, the company just upsized their credit facility in Dec 2025 & has $393.7m undrawn on their revolver. Due diligence shouldn’t be an issue, they even say they can get it done by May 8th. Done deal, or chance of a break here ? Let’s dig in……..