The litigation centers on the period leading up to the merger between DNOW and MRC Global. According to the complaint, DNOW management characterized MRC’s new Enterprise Resource Planning (ERP) system as a state-of-the-art solution capable of optimizing supply chain efficiency and order processing. These assurances were provided to investors during the Q3 2025 earnings call, just one day before the merger closed.
DNOW Inc. Faces Securities Class Action Over Failed ERP Integration
A federal securities class action lawsuit alleges that DNOW Inc. misled shareholders regarding its acquisition of MRC Global Inc. The complaint claims management concealed severe enterprise software failures during the merger process, leading to a 19% drop in stock value when the technical obstacles were finally disclosed to the market.
By February 20, 2026, the company’s narrative shifted sharply. Financial results for the final quarter of 2025 revealed that persistent software flaws were significantly hindering revenue and impeding customer service operations. The company admitted that the software’s design architecture was fundamentally flawed, necessitating unexpected capital expenditures and forcing a delay in 2026 financial guidance. Hagens Berman partner Reed Kathrein stated that the firm is investigating whether these integration failures were intentionally downplayed to secure shareholder approval for the deal. Investors who held common stock as of August 5, 2025, have until October 2, 2026, to apply for lead plaintiff status.
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