Pegasus Solutions, Inc. to be Acquired for Approximately $275 million

Equity Group Led by Prides Capital Partners, LLC

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. October 14, 2008

DALLAS, TX, 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 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 Rights Agreement.