Prides Capital Partners, LLC for Approximately $275 million
|DALLAS, December 19, 2005 — Pegasus Solutions, Inc. (Nasdaq: PEGS)
announced today that it 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
“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 Rights Agreement.
Dallas-based Pegasus Solutions, Inc. (Nasdaq: PEGS) 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, www.hotelbook.com™. 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 www.pegs.com.
About Prides Capital Partners, LLC
Prides Capital, based in Boston and San Francisco, specializes in strategic block, active investing in small- and micro-cap public and private companies. In partnership with its management teams, Prides seeks to create value through strategic, operational and financial assistance. For more information, please visit http://www.pridescapital.com.
Founded in 1980, The Tudor Group is a leading alternative asset management firm consisting of Tudor Investment Corporation and its affiliates. Managing over $13 billion, the firm’s investment capabilities are broad and diverse. The Tudor Group is active in global macro trading, equity investing in the U.S., Europe and Asia, emerging markets, commodities, event driven strategies and technical trading systems.
Some statements made in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
|Also See:||Pegasus Solutions, Inc. Signs Agreement to Acquire the Stock of Unirez, Inc. for $38 million in Cash / November 2003|