Blackstone Acquires Majority Stake in Leading Hotel Accounting Software and Services Provider M3

Rhea-AI Summary

M3, the leading hospitality accounting software in North America, has announced a majority investment from Blackstone Growth. This partnership aims to accelerate M3's growth by enhancing product expansion and supporting software adoption. AAHOA, representing nearly 20,000 hotel owners, will make its first strategic investment alongside Blackstone.

Founded in 1998, M3 has grown into a prominent back-office accounting software platform, serving over 1,000 hotel operators and management companies. The company offers solutions for accounting, labor management, and business intelligence to more than 8,000 properties across North America. M3 has been ranked as the top hotel accounting software provider by HotelTech Report for four consecutive years.

Positive

• Blackstone's majority investment will accelerate M3's growth and product expansion
• AAHOA's strategic investment alongside Blackstone adds industry credibility
• M3 serves over 1,000 hotel operators and 8,000 properties across North America
• Ranked as the top hotel accounting software provider for four consecutive years

Negative

• None.

Insights

Financial Analyst

Blackstone's majority stake acquisition in M3 is a significant move in the hospitality tech sector. This investment highlights the growing importance of back-office software in the hotel industry. With M3's strong market position and Blackstone's extensive resources, we can expect accelerated product development and market expansion.

The partnership with AAHOA, representing 60% of U.S. hotels, adds strategic value. This could lead to increased adoption of M3's solutions among AAHOA members, potentially boosting M3's market share. While financial terms weren't disclosed, this deal likely provides M3 with substantial capital for growth and innovation, positioning it well against competitors in the hospitality tech space.

Tech Expert

M3's success in becoming the top-rated hotel accounting software for four consecutive years demonstrates its strong product-market fit. The investment from Blackstone could significantly enhance M3's technological capabilities, potentially leading to more advanced features in accounting, labor management and business intelligence.

With Blackstone's backing, M3 might accelerate its R&D efforts, possibly venturing into areas like AI-driven forecasting or blockchain for secure transactions. The partnership could also facilitate integration with other hospitality tech solutions in Blackstone's portfolio, creating a more comprehensive ecosystem for hotel operators. This could give M3 a competitive edge in attracting larger hotel chains and management companies.

Market Research Analyst

This deal signifies a growing trend of private equity interest in hospitality technology. As hotels seek to optimize operations post-pandemic, demand for efficient back-office solutions is rising. M3's position as a leading software provider in this niche makes it an attractive investment.

The involvement of AAHOA is particularly noteworthy. It could lead to preferential access to a vast network of hotel owners, potentially accelerating M3's customer acquisition. However, this also raises questions about market saturation and future growth opportunities. M3 might need to consider international expansion or diversification into adjacent sectors to maintain its growth trajectory in the long term.

Growth investment made in partnership with Asian American Hotel Owners Association (AAHOA)

NEW YORK & ATLANTA--(BUSINESS WIRE)-- M3, LLC (“M3”), voted the number-one hospitality accounting software in North America, today announced it has signed a definitive agreement for a majority investment from Blackstone Growth and affiliated funds (collectively “Blackstone”). The investment will help to accelerate the company’s growth by enhancing new product expansion and supporting the adoption of M3’s software, which enables hotel operators to run more efficiently and effectively. AAHOA, representing nearly 20,000 hotel owners and 60% of hotels across the United States, will make its first ever strategic investment alongside Blackstone.

Founded in 1998 by hospitality industry veteran John McKibbon to address the accounting needs of his own family’s hotel management company, M3 has grown into a leading hospitality-focused back-office accounting software platform that serves as the system-of-record for financial data for more than a thousand hotel operators and management companies today. It currently offers technological solutions including accounting, labor management and business intelligence to more than 8,000 properties across North America. M3 has ranked as the nation’s number-one hotel accounting software and financial reporting provider by HotelTech Report for the past four years.

John McKibbon, Founder of M3, said: “Blackstone’s background in hospitality made them the natural choice as our first equity partner. Together, we look forward to propelling our innovation and growth to best serve our customers in an era of continued technological advancement.”

Ramzi Ramsey, a Managing Director at Blackstone, said: “M3 has become a leading finance and accounting software platform for countless independent and family owned hotel operators, as well as some of the largest hotel management companies, that have relied on its technology to support the professionalization and scale of their businesses. As M3’s first institutional capital partner, we’re excited to harness Blackstone’s deep expertise and network within the real estate and technology sectors to help enhance its product offering to better serve new and existing companies as M3 continues to grow.”

Allen Read and Casi Johnson, CEO and President of M3, said: “For over 25 years, M3 has been focused on delivering a comprehensive solution while providing world class support to our customers. We remain steadfast in our commitment to serving our customers and are thrilled to partner with Blackstone to continue to scale our vision, team, and culture.”

Kevin Chang, a Principal at Blackstone, said: “M3 has built an enviable market position thanks to its robust technology and customer-centric approach. We are eager to build upon this strong foundation and support M3 in its next phase of growth and expansion in the broader hospitality market.”

Miraj S. Patel, AAHOA Chairman, said: “AAHOA is excited to make its first strategic investment alongside Blackstone, a move that will significantly benefit our members and the entire hospitality industry. This partnership with M3 will bring AAHOA Members access to advanced technology and innovative solutions that can enhance operational efficiency and drive growth. We are committed to empowering our members with the tools and resources needed to succeed in an evolving market, and this collaboration marks a pivotal step toward achieving that goal.”

Terms of the transaction were not disclosed. Carlton Fields, P.A., served as legal counsel to M3 and Houlihan Lokey has provided certain assistance to M3 in connection with the transaction. Evercore served as exclusive financial advisor to Blackstone and Kirkland & Ellis LLP served as legal counsel to Blackstone.

About M3

Built by hoteliers exclusively for hoteliers, M3 is a robust cloud-based financial platform and services company serving over 8,000 properties across North America’s hospitality industry helping drive cost savings, revenue enhancement, and business insight. After over 25 years in business, M3 touts a 95 percent customer retention rate. Used by over 1,000 management groups and owner-operators and hotels of all sizes, the platform works seamlessly with other key systems and tools in the hospitality industry. It offers robust accounting and financial analysis across entire portfolios with optional operations and time management features. M3’s Professional Services team provides on-demand accounting and bookkeeping support for hotels and portfolios of any size by offering a full range of customized accounting solutions that can scale with a hotelier’s needs. Privately held and employee-owned, M3 continues to constantly enhance products and services with regular releases and updates. “M3”, “CoreSelect”, “M3 Concierge”, and “Accounting Core” are all trademarks owned by M3; all other marks are owned by their respective owners. For more information, visit www.m3as.com.

About Blackstone

Blackstone is the world’s largest alternative asset manager. We seek to deliver compelling returns for institutional and individual investors by strengthening the companies in which we invest. Our more than $1 trillion in assets under management include global investment strategies focused on real estate, private equity, infrastructure, life sciences, growth equity, credit, real assets, secondaries and hedge funds. Further information is available at www.blackstone.com. Follow @blackstone on LinkedIn, X (Twitter), and Instagram.

About AAHOA

AAHOA is the largest hotel owner’s association in the world, with Member-owned properties representing a significant part of the U.S. economy. AAHOA's 20,000 members own 60% of the hotels in the United States and are responsible for 1.7% of the nation’s GDP. More than 1 million employees work at AAHOA Member-owned hotels, earning $47 billion annually, and member-owned hotels support 4.2 million U.S. jobs across all sectors of the hospitality industry. AAHOA's mission is to advance and protect the business interests of hotel owners through advocacy, industry leadership, professional development, member benefits, and community engagement.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240814720837/en/

Contact



Blackstone

Mariel Seidman-Gati

mariel.seidmangati@blackstone.com

(917) 698-1674

Source: Blackstone

FAQ

What is the significance of Blackstone's investment in M3 for the hospitality industry?

Blackstone's investment in M3 is significant for the hospitality industry as it will accelerate M3's growth, enhance product expansion, and support wider adoption of its software. This will enable hotel operators to run more efficiently and effectively, potentially improving the overall performance of the industry.

How many properties does M3's software currently serve?

M3's software currently serves more than 8,000 properties across North America, offering solutions for accounting, labor management, and business intelligence.

What role does AAHOA play in the Blackstone-M3 deal?

AAHOA (Asian American Hotel Owners Association) is making its first ever strategic investment alongside Blackstone in M3. This move is expected to benefit AAHOA's nearly 20,000 hotel owner members by providing access to advanced technology and innovative solutions to enhance operational efficiency.

How long has M3 been ranked as the top hotel accounting software provider?

M3 has been ranked as the number-one hotel accounting software and financial reporting provider by HotelTech Report for the past four years consecutively.