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

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,

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