Our integrated solution enables our clients to focus on their core
business, products and services instead of making substantial investments in
transaction management systems, facilities and ongoing personnel. Additionally,
our services enable our clients to quickly capitalize on new business
opportunities, provide an improved experience for their customers, improve
operating efficiencies and cash flows and access sophisticated technology.
Our objective is to grow rapidly by being an international provider of
business-to-business and business-to-consumer transaction management services
for both traditional commerce and e-commerce businesses. The key elements of our
business strategy are to:
- target clients with major brand names;
- expand existing client relationships;
- promote our PFSweb brand;
- seek strategic alliances and acquisitions; and
- expand our international presence.
In order to execute our strategy, we must, among other things, continue to
incur significant operating and marketing expenses, invest in additional
technology infrastructure and maintain sufficient capacity. In addition, if our
spin-off from Daisytek does not occur, our ability to grow our business with
some manufacturers and realize other benefits may be adversely affected. See
"Risk Factors" and "Proposed Spin-off" for a more complete discussion of these
and other risk factors.
OUR RELATIONSHIP WITH DAISYTEK
We are currently a subsidiary of Daisytek International Corporation, one of
the world's largest wholesale distributors of non-paper consumable computer
supplies and professional video and audio tape products. Our business unit was
formed in 1991 to leverage Daisytek's core competencies in customer service,
order management, product fulfillment and distribution. Since 1996, the
operations of our business unit have been primarily focused in several Daisytek
subsidiaries operating collectively as Priority Fulfillment Services, Inc.
("PFS"). After the completion of this offering, Daisytek will own approximately
82.2% of the outstanding shares of our common stock, or approximately 80.1% if
the underwriters exercise their over-allotment option in full. Daisytek has
announced that it plans to effect the complete separation of PFSweb from
Daisytek sometime in mid-2000 (and within one year of the closing of this
offering) through a pro rata distribution to its common stockholders of all of
the shares of our common stock which Daisytek then holds (which is also known as
a "spin-off"). There are, however, various conditions to the completion of the
spin-off, and we cannot assure you as to whether or when it will occur.
Upon completion of this offering we will enter into a number of agreements
with Daisytek relating to our business and our proposed spin-off from Daisytek.
Under these agreements, Daisytek will continue to provide us with certain
administrative services and facilities, and we will provide Daisytek with
transaction management services for its U.S. wholesale consumable computer
supplies business. See "Certain Transactions" and "Risk Factors -- Risks Related
We were incorporated in Delaware in 1999 to be, upon completion of this
offering, the parent holding company for PFS. Our principal executive offices
are located at 500 North Central Expressway, Plano, Texas 75074, and our
telephone number is 972-881-2900.
We maintain a Web site at www.pfsweb.com, and Daisytek maintains a Web site
at www.daisytek.com. Information contained on these Web sites does not
constitute part of this prospectus and is not incorporated by reference in this