Sometimes the acquired eats the acquirer and that is sort of what happened in the wholesale executive changes at Pegasus Solutions this week.
Pegasus acquired Open Hospitality, a hotel marketing company with some purported Web and mobile savvy, in October 2011.
And, in a swift blow this week, David Millili, the CEO of Open Hospitality, both when it was a standalone company and when it became a Pegasus unit, ascended to the Pegasus CEO role. Millili also had been Pegasus' chief web officer in addition to Open Hospitality CEO prior to this week's promotion.
And, an ex-Open Hospitality executive vice president, Chris Wichers, emerged as the Pegasus chief of sales, a newly created position, and two Pegasus board members are out.
Millili, who replaced Mike Kistner as Pegasus CEO this week, says the board wanted Pegasus to take on Open Hospitality's "small company mentality" and its emphasis on web services, SEO, mobile and social media, for instance.
If you are keeping score:
- Millili replaced Kistner as CEO and took his place on the Pegasus board;
- Interim CFO and Pegasus board member Rebecca Dernbach, a principal at Pegasus majority owner Prides Capital, left Pegasus and her board seat is vacant.
- Veteran Pegasus board member James Fox land's the board chairman role, replacing Kistner in that position.
- Steve Lapekas, executive vice president, corporate business development at Pegasus, is promoted to CIO, replacing Mark Peacock, who left the company along with Kistner and Dernbach on Tuesday.
- Former Open Hospitality executive vice president Wichers now has the tag, chief sales officer, a newly created slot.
- A new CFO is scheduled to be appointed the week of June 18.
Millili insists there is no change in ownership at Pegasus -- despite the departure of Pride Capital's Dernbach -- and that privately held Pegasus is not for sale.
Pegasus will keep its bedrock switch business, of course, but Millili says "we're injecting more Open Hospitality DNA into Pegasus."
For example, Pegasus is launching Pegasus Connect, which will provide basic GDS connectivity, but will enable clients to add services based on their specific needs and thus be more flexible than past offerings, Millili says.
He says Pegasus is doing a "great job" and is a "leader in the marketplace, but we want to get back to being number one and the industry leader."
Asked whether companies such as Sabre Hospitality Solutions or TravelClick may be making strides at Pegasus' expense, Millili says there is no industry leader in the global hospitality solutions business.
"There are many who are vying for it," Millili says. "It is our goal to be the number one hospitality solutions leader in the world."
Sabre estimates that its CRS business is the world's largest with a 28% share, according to a confidential document released to investors in April and obtained by Tnooz.
In 2011, Sabre Hospitality Solutions' revenue increased 19% to $89.6 million, although operating income fell 36% to $6.2 million, the Sabre document states.
Meanwhile, despite the dramatic executive shuffle at Pegasus this week, don't be surprised if more changes aren't afoot.
Millili says no more personnel changes -- other than naming the new CFO and filling Dernbach's vacant board slot -- are imminent, but "every business is looking to make sure it's got the best people and players to be number one."
Pegasus will continue to look to make that happen, Millili says.