Fort Worth, TX-based Distribution Solutions Group reported its 2024 third quarter financial results on Oct. 30, which showed annual sales growth that was essentially entirely driven by acquisitions.

The industrial distributor posted 3Q total sales of $468 million, including $38.1 million of incremental revenue from three acquisitions closed in 2024. Sales were up 6.6% year-over-year and up 6.5% compared to the second quarter. Organic sales declined 2.1% compared to the year prior but improved 0.2% sequentially.

DSG’s 3Q adjusted EBITDA was $49.1 million,on a 10.5% margin, compared to $43.7 million on a 10% margin year-over-year. Sequentially, adjusted EBITDA increased by $3.9 million from the second quarter of 2024; and increased as a percent of sales by 20 basis points.

The company acquired Canadian MRO distributor Source Atlantic under its Lawson Products business unit in the third quarter, which, combined with Lawson’s The Bolt Supply House, added CAD $250 million revenue from Canadian business which the company said, “will drive DSG’s growth by expanding its scaled, customer base and geographic reach.”

“Acquisitions in 2024 drove the quarterly sales increase, and we reported average daily sales for Lawson up 1.4%, for Gexpro Services up 12.5%, and for TestEquity down 7.4% for the period,” DSG CEO and Chairman Bryan King said in the company’s financial release. “Sequentially, compared to the second quarter, total sales grew by 6.5%, organic sales were up slightly at 0.2%, and the Adjusted EBITDA margin of 10.5% expanded by 20 basis points.”

By DSG business unit in 2Q:

• Lawson Products logged sales of $117 million, up from $114 million year-over-year. The increase was attributed to the MRO vertical’s acquisition of Source Atlantic.
• Gexpro Services’ sales of $116 million were up compared to $103 million of a year prior, and up from 2Q’s $107.1 million. The 3Q growth was attributed to its acquisition of Tech Component Resources, a distributor of fasteners, mechanical components and other industrial products in Southeast Asia. The company said the acquisition supports existing OEM customers’ expansion plans.
• TestEquity sales decreased 7.4% from $207 million in 2Q to $195 million in 3Q. TestEquity acquired ConRes Test Equipment from Continental Resources. The company had $12 million in annual revenue and DSG said its “further strengthens its customer intimacy with its leasing and calibration service offerings.”

“We remain focused on deploying our capital for the highest returns in acquisitions and organic investments,” King added. “Our asset-light business model drives strong cash flow conversion, and our focus on capital returns positions us well to maximize long-term value for our shareholders.”