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PFSWeb and eCost finalize their merger
eCost will become a wholly owned subsidiary of PFSweb, operating under the eCost.com name and maintaining its headquarters. The combined revenue between both companies for the twelve months ended Sept. 30, 2005 totaled $528 million.
Online personal computer and electronics retailer eCost.com and PFSweb Inc. are finalizing their merger.
Under the terms of the agreement, eCost will become a wholly owned subsidiary of PFSweb, operating under the eCost.com name and maintaining its headquarters in Torrance, Calif. PFSweb will issue to eCost.com shareholders one PFSweb common share for each outstanding share of eCost in a tax-free, share-for-share transaction. The combined revenue between both companies for the trailing twelve months ended Sept. 30, 2005 totaled $528 million.
Both the PFSweb and eCost.com boards have unanimously approved the merger transaction, PFSweb says. Wells Fargo Securities LLC acted as PFSweb`s financial advisor and Thomas Weisel Partners LLC acted as eCost`s financial advisor.
The merger is expected to be completed in the first quarter of 2006. “Our highly recognizable e-commerce platform and growing 1.3 million total customers for new and refurbished products combined with PFSweb`s distribution and fulfillment capabilities provide strong growth opportunities,” says eCost.com CEO Adam Shaffer. “This merger complements both businesses.”
In the past year, eCost has experienced several transitions. In April, eCost was spun off as a separate company by its former parent, PC Mall Inc. ECost.com is a multi-category online discount retailer of close-out and refurbished brand-name merchandise for consumers and small business buyers. It markets over 100,000 products from manufacturers such as Apple, Canon, Citizen, Denon, HP, IBM, JVC, Nikon, Onkyo, Seiko, Sony and Toshiba.
As a result of the merger, the combined company can generate significant cost savings of approximately $4 million to $5 million per year, says PFSWeb CEO Mark Layton.