The acquisition is part of a takeover plan of a former spin-off, PFSweb Inc. Of the $16 million, PFSweb will receive $11 million for the logistics and distribution hub. The takeover also calls for the termination of transaction management service pacts between the companies. A corporate statement says PFSweb will use its funds to initiate IT platforms and expand fulfillment capabilities to support Daisytek's office product strategy. The New Economy deal will "allow Daisytek to once again become the Ultimate Distribution Machine," says Jim Powell, Daisytek's president and CEO.
Daisytek is calculating the transaction will result in a one-time special charge of $2.7 million after taxes this quarter. The expected fee consists of transaction costs, separation payment and fiscal settlement of balances between the two companies. Nonetheless, Daisytek is projecting it will end the year with a 10% to 15% revenue growth.
Daisytek is putting into place a new distribution strategy that calls for setting up several regional hubs, of which Memphis is the first. The firm currently has sales and distribution centers in Argentina, Canada and Mexico as well as other US location. Daisytek is a leading distributor of computer supplies, office products and recording media.
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