Pegasus Solutions
, Inc. today announced the signing of a definitive agreement to acquire the stock of Unirez, Inc. for $38 million in cash. The transaction is expected to generate approximately $10 million in future tax deductions that will effectively reduce the purchase price. The acquisition is subject to completion of due diligence and other customary contingencies.

By adding Unirez, Pegasus would move forward in fulfilling its multi-tiered representation strategy for independent and small group hotels by providing a lower-cost distribution service, in addition to the full-service offering currently provided through Pegasus’ Utell representation service.

 

“In addition to our long history with the world’s largest hotel chains, a key element of our strategy is to serve the needs of smaller chains and independent hotels with valuable services that are cost-effective for that market,” said John F. Davis III, chairman, president and CEO of Pegasus. “With the acquisition of Unirez, we would expect to be better positioned than ever before to serve the independent and small group hotel market.”

 

If concluded, the acquisition is expected to close in the fourth quarter and be accretive on a cash earnings basis immediately although results may vary on a GAAP basis. It is not expected to have a material impact on fourth quarter 2003 cash earnings. The company will provide more information regarding its integration plans and the financial impact of the acquisition after closing.

 

Dallas-based Unirez serves independent properties and small group hotels by providing central reservation services that enable distribution of room inventory through Global Distribution Systems (GDSs) and Internet channels. In recent years, the demand for this type of “connectivity-only” service has increased, with independent hotels relying more on Internet channels, as well as their own marketing efforts and web sites, to drive business.

 

The Unirez technology platform gives customers the flexibility to buy only those services they require. Unirez owns and operates its own central reservation system, Hotel Factory?”, using the application service provider (ASP) model. All applications run via the Internet. Unirez customers have the ability to enter and control all the information about the hotel, including rates and packages, room types and descriptions, availability, and any descriptive information. With this automated process, hotel data is immediately uploaded into various distribution channels and can be modified at any time.

 

“Our goal was to develop a reservation system that is highly automated and easy to use, giving hotels more access to data and allowing them to make changes at a moment’s notice,” said Dwight Hendrickson, president and CEO of Unirez. “We’ve accomplished our original goal and, at this juncture, we believe that joining forces with Pegasus would afford the combined companies exciting growth possibilities.”

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