DNOW Faces Class Action Lawsuit Over MRC Global Merger Disclosures

The lawsuit, filed by the firm Hagens Berman, centers on allegations that DNOW’s merger proxy materials failed to disclose material defects in MRC Global’s Enterprise Resource Planning system. Management had previously characterized the software as a state-of-the-art tool capable of optimizing inventory and supply chain efficiency, dismissing earlier glitches as isolated events. These assurances were provided during a Q3 2025 earnings call, just one day before the merger closed.

The reality of these technical issues surfaced on February 20, 2026, when DNOW reported its full-year financial results. The company revealed that persistent software obstacles had severely hampered operations, triggered a decline in revenues, and necessitated unexpected capital expenditures. Following the disclosure, DNOW stock dropped 19% in a single trading session. Partner Reed Kathrein, who is leading the investigation, stated that the firm is focused on whether management downplayed these integration failures to ensure the deal’s approval. Shareholders who held common stock as of the August 5, 2025, record date are eligible to participate in the suit.