Blackstone has acquired a stake in M3, the accounting software for the hospitality industry. In a statement, M3 said it had signed an agreement for a majority stake from Blackstone Growth and affiliated funds. Terms of the deal were not disclosed.
The investment will accelerate M3’s growth by facilitating new product expansion and supporting the implementation of M3’s software. This is M3’s first equity investment.
AAHOA, which represents approximately 20,000 hotel owners and 60% of the hotels in the United States, will join Blackstone in making its first strategic investment in M3. AAHOA members will benefit from the partnership with M3 by gaining access to advanced technology and innovative solutions that can improve operational efficiency and drive growth, said AAHOA Chairman Miraj S. Patel.
Blackstone’s experience in the hospitality industry made the company a “natural choice” for M3 as a capital partner, M3 founder John McKibbon said in the statement. “Together, we look forward to driving our innovation and growth to best serve our customers in an era of continuous technological advancement.”
McKibbon founded M3 in 1998 to meet the accounting needs of his family’s hotel management company. The company has since grown into a hospitality-focused, cloud-based back-office accounting software platform that serves as a system of record for financial data for hotel operators and management companies. The company provides technology solutions including accounting, human resource management and business intelligence for over 8,000 hotels in North America.
M3 has been in the hospitality industry for over 25 years, has a 95% customer retention rate and is used by over 1,000 management groups, owners, operators and hotels.
“As M3’s first institutional capital partner, we are excited to leverage Blackstone’s deep real estate and technology expertise and network to expand product offerings and better serve new and existing companies as M3 continues to grow,” said Ramzi Ramsey, Managing Director at Blackstone.
Blackstone is a leading asset manager with over $1 trillion in assets under management, including global investment strategies focused on real estate, private equity, infrastructure, life sciences, growth capital, credit, real assets, secondary markets and hedge funds.
Carlton Fields, PA, acted as legal counsel to M3, while Houlihan Lokey assisted M3 in connection with the transaction. Evercore acted as exclusive financial advisor to Blackstone and Kirkland & Ellis LLP acted as legal counsel to Blackstone.
