Hedge fund takes Pegasus private

Boston-based Prides Capital Partners has acquired travel technology provider Pegasus Solutions for $275 million.

An investor group led by Prides Capital Partners and including entities affiliated with Prides, Tudor Investment Corporation and Belfer Management, has acquired publicly traded Pegasus Solutions for $275 million.

The Dallas-based company provides technology and services to hotels and travel distributors. Founded in 1989, Pegasus says it counts a majority of the world’s travel agencies and more than 60,000 hotel properties as customers. The company’s services include central reservation systems, electronic distribution services, payment services and marketing representation services.

Hank Lawlor, managing partner with Prides, said the jewel in the crown of Pegasus’ entities is Utell, an online service that handles reservations for hotels worldwide.

“Utell gets paid per click, per transaction,” he said. “It’s a wonderful recurring revenue model, which is something that we’re very attracted to.”

Lawlor described Prides as a hybrid public equity/private equity company with a hedge fund structure. He said the firm pursues private equity-like investing in the public and private markets. He added that unlike some hedge funds which have just recently gotten into the private equity game, Prides was set up with this structure in mind.

“We’re not the flavor of the month,” he said. “We’ve been in this structure for two and a half years and this has been our philosophy since inception.”

Tudor Investment Corporation, part of The Tudor Group, is an alternative asset management firm managing over $14 billion. Belfer Management is a diversified investment firm emphasizing the energy, real estate and financial services industries.

Pegasus ceased trading on the Nasdaq at market close today, and its shareholders will receive $9.50 a share.