Pegasus Solutions has executed a definitive merger agreement with an equity group led by
Prides Capital Partners, LLC, including entities affiliated with Prides, Tudor
Investment Corporation and Belfer Management.
The transaction is valued at approximately $275 million. Under the terms of the merger agreement, Pegasus stockholders not affiliated with the investment group will receive $9.50 in cash for each share of Pegasus common stock they hold.
“We are very pleased with the results of our strategic alternative review,” said
John F. Davis III, president, chief executive officer and chairman of Pegasus
Solutions. “Our focus will continue to be on delivering technology and business
process solutions that help hotels and travel distributors come together to maximize
revenue and profitability.”
After unanimous recommendation by the corporate strategy committee, which is made up
entirely of non-management members of the board of directors, Pegasus’ board of
directors approved the merger agreement and recommended to Pegasus’ stockholders
that they adopt the agreement.
Completion of the transaction is contingent on, among
other things, regulatory review, approval by the stockholders of Pegasus and funding
of debt to complete the acquisition. The transaction is expected to close in the
first half of 2006.
“We will maintain the same service lines and products and will continue to focus on
improving those products and the speed with which we bring them to market,” noted
Bob Boles, Pegasus’ chief operating officer.
Davis noted that Prides Capital and the other members of the investment group—many
of whom are existing Pegasus stockholders—are committed to long-term investing.
“This acquisition sends a clear message that we intend to renew our leadership
within the travel industry,” Davis said.
“Pegasus exemplifies the kind of company we look for as a part of our investment
portfolio,” said Kevin Richardson, Prides Capital’s managing partner.
“We have a
high regard for the quality of the business and management’s focus on meeting
customer needs in the dynamic travel industry.”
Bear, Stearns & Co. Inc. acted as financial advisor to Pegasus and provided a
fairness opinion to the board of directors of Pegasus in connection with the
transaction. Locke Liddell & Sapp LLP acted as legal advisor to Pegasus in
connection with the transaction. Simpson Thacher & Bartlett LLP acted as legal
advisor to Prides Capital in connection with the transaction. J.P. Morgan Securities
is arranging the debt financing.
Concurrently with the execution of the merger agreement, Pegasus amended the Rights
Agreement between Pegasus and American Securities Transfer & Trust, Inc., the
company’s stock transfer agent, so that none of the execution, delivery or
performance of the merger agreement, the consummation of the merger or any of the
other transactions contemplated by and pursuant to the merger agreement will trigger
the separation or exercise of the stockholder rights or any adverse event under the
Dallas-based Pegasus Solutions, Inc. is a global leader in providing
technology and services to hotels and travel distributors. Founded in 1989, Pegasus’
customers include a majority of the world’s travel agencies and more than 60,000
hotel properties around the globe.
Pegasus’ services include central reservation
systems, electronic distribution services, commission processing and payment
services, and marketing representation services, including the consumer Web site,
The company’s representation services, including Utell by
Pegasus? and Unirez by Pegasus?, are used by nearly 7,000 member hotels in 140
countries, making Pegasus the hotel industry’s largest third-party marketing and
reservations provider. Pegasus has 18 offices in 13 countries, including regional
hubs in London, Scottsdale and Singapore. For more information, please visit