Hagens Berman Targets DNOW Over Alleged Merger Proxy Deception
A securities class action lawsuit now challenges DNOW Inc.’s acquisition of MRC Global, alleging that management concealed critical software failures to secure shareholder approval. Investors who held stock during the 2025 merger now face significant losses following a post-acquisition stock collapse linked to systemic ERP integration issues.
The legal action centers on accusations that DNOW’s proxy materials omitted material risks regarding MRC Global’s enterprise software. Just one day before the merger closed on November 5, 2025, DNOW management characterized MRC’s ERP system as state-of-the-art, dismissing earlier technical glitches as isolated events. However, subsequent disclosures in February 2026 revealed that persistent software flaws had severely hampered MRC’s operations, leading to sharp revenue declines and unexpected capital expenditures.
Following the revelation that the software architecture was fundamentally flawed, DNOW was forced to delay its 2026 financial guidance. The market reaction was immediate, with DNOW shares plummeting 19% in a single session. Reed Kathrein, the Hagens Berman partner leading the investigation, stated that the firm is scrutinizing whether these integration failures were intentionally downplayed to push the deal through. Shareholders who held DNOW common stock as of the August 5, 2025, record date have until October 2, 2026, to apply for the role of lead plaintiff.
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