CHICAGO — Lawson Products, Inc. announced the completion of its strategic combination with TestEquity and Gexpro Services in all-stock merger transactions creating a specialty distribution platform under a holding company structure. Pursuant to the merger agreements, Lawson issued an aggregate of 10.3 million shares of Lawson common stock to the former owners of TestEquity and Gexpro Services, which are entities affiliated with Luther King Capital Management Corporation (“LKCM”) and J. Bryan King, the Chairman of Lawson Products. An additional 1.7 million shares of Lawson common stock remain potentially issuable to entities affiliated with LKCM and Mr. King upon meeting the conditions of certain earn-out provisions within the merger agreements. Entities affiliated with LKCM and Mr. King now own shares that represent approximately 75% of the outstanding shares of Lawson common stock.
All Lawson shares outstanding immediately before the mergers continue to remain outstanding after the combination and remain listed for trading on the NASDAQ Global Select Market under the symbol “LAWS”.
J. Bryan King, Chairman of Lawson Products commented, “We are excited to announce the completion of this strategic combination. We expect the merger of these businesses to generate significant earnings, improved cash flow and incremental value for our shareholders. The holding company structure will enable the combined companies to leverage best practices, back-office resources and technology across the platform to help drive operating efficiencies and leverage shared solutions. These best-in-class specialty distribution businesses offer high-touch, technical, value-added service delivery models for their customers, which are well-positioned for accretive acquisitions across highly fragmented markets.”
In correlation with the merger, the company announced the appointment of Cesar Lanuza as President and Chief Executive Officer of Lawson’s operating company, and the retirement of President and Chief Executive Officer, Michael G. DeCata, effective April 4, 2022, as part of an ongoing succession plan. DeCata will transition his role through May 1, 2022, when he will also retire from his remaining positions, including as a member of Lawson’s Board of Directors and will then assume a role providing advisory services to Lawson’s board as part of a four-year agreement.
King commented, “As part of our continued succession planning and search process, we are very excited to welcome Cesar Lanuza as the new President and CEO of the Lawson Products operating company. Cesar’s high energy, industry expertise, and successful track record, coupled with his customer-centric leadership style, are well-suited to take Lawson to the next level of growth and profitability. He is an excellent fit with our vision and direction following the completion of our strategic combination announced late last week.”
“I am thrilled to be joining Lawson at such an exciting time for the Company and our customers,” said Lanuza. “Lawson Products is a world-class organization with strong and engaged teams, and my goal is to push the vision forward to further accelerate revenue growth and profitability. I am confident that we will continue to evolve our products, services, and capabilities to better service our customers. We have a strategic growth plan for Lawson through both organic and inorganic strategies and have a clear focus on end markets with longer-term secular growth. The strategic combination of Lawson, TestEquity and Gexpro Services opens new opportunities to increase wallet share through cross-selling, leveraging best-in-class services and expanding our digital capabilities across the platform. The future has never been brighter for Lawson Products.”
King continued, “On behalf of the Board, management team and Lawson employees, I want to thank Mike for his significant contributions that have led to the success and growth of Lawson for the last decade. During his tenure, Mike has been a steadfast leader and his commitment to operating excellence has been instrumental in the Company’s evolution and value creation for our shareholders.”
DeCata, said, “I want to sincerely thank the Lawson Board of Directors for their confidence in me, and I would also like to thank and recognize the dedicated Lawson employees for their hard work and commitment during my tenure at Lawson. It has been an honor to serve as President and CEO during this important period of transformation and growth for the Company. As an ongoing Lawson shareholder, I am highly confident in Lawson’s ability to grow and create long-term value under Cesar’s leadership. I look forward to my new role as an advisor to the Board and especially looking forward to spending more time with my family.”
Lanuza brings a combined 30 years of global experience and is a multi-cultural and bi-lingual leader, who most recently served as Chief Executive Officer and Director at Jon-Don, LLC. Prior to this position, he served as President for North America and Asia Pacific at Optimas OE Solutions, LLC and previously as Vice President/General Manager at W.W. Grainger, Inc. where he also served in various senior-level positions for more than 10 years, located in North America and South America. Lanuza has also held multiple cross-functional roles at General Electric-Healthcare and United Technologies. He earned an engineering degree from Universidad Internacional de las Americas in San Jose, Costa Rica and an MBA from INCAE Business School. Cesar resides in the Chicago area with his wife, and he has two sons.
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