RealTime IT News

Pegasus Systems to Acquire REZsolutions Inc.

Hotel industry transaction processing company Pegasus Systems Inc. signed a definitive agreement to pay $250 million for REZsolutions Inc., a provider of reservation technology systems and representation services to the hotel industry.

Pegasus said the acquisition would enable it to offer hotels and travel agents a much broader product line, and will strengthen Pegasus' presence in Europe and the Asia Pacific.

Under the terms of the agreement, Pegasus Systems will issue 2.66 million shares of common stock, pay $115 million in cash and agree to a $20 million note payable to Utell International Ltd., a subsidiary of Reed Elsevier plc, the majority stockholder in REZsolutions. The transaction is valued at approximately $250 million.

On a pro-forma basis for 1999, the combined company will have estimated revenues of $180 million and an employee base of more than 2,100 located in more than 50 offices in 39 countries.

"We believe this acquisition will transform Pegasus into the leading technology solutions company for the hotel industry worldwide," said John F. Davis III, president and chief executive officer of Pegasus Systems.

"The transaction is complementary in that we share a common customer base of hotels and travel agents, and additive in that REZsolutions gives the new company an international presence and access to new technologies, customers and a worldwide infrastructure."

REZsolutions has a portfolio of hotel industry information technology products and services, including central reservation systems, a property management system, hotel and brand representation, commission processing services and global reservations distribution through call centers, global distribution systems (GDS) such as Sabre and Galileo, as well as the Internet.

REZsolutions' core asset is its central reservation system (CRS), which is utilized by more than 80 hotel brands to make reservations at more than 25,000 hotels around the world.

Mac Highet, president and CEO of REZsolutions will join Pegasus' management team, serving as Pegasus Systems' chief operating officer. Pegasus' customers include seven of the 10 largest U.S.-based travel agencies, as well as approximately 32,000 hotel properties around the world.

Pegasus Systems also operates its own consumer travel reservations site, TravelWeb.com.