Blackstone has acquired a stake in M3, the hospitality accounting software. In a statement, M3 said it has inked an agreement for a majority investment from Blackstone Growth and affiliated funds. Terms of the deal were not disclosed.
The investment will help 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 around 20,000 hotel owners and 60% of hotels in the U.S., will be making its first strategic investment in M3 alongside Blackstone. AAHOA members will benefit from its partnership with M3, as it will provide access to advanced technology and innovative solutions which can improve operational efficiency and bolster growth, said AAHOA Chairman Miraj S. Patel.
Blackstone’s background in hospitality made it M3’s “natural choice” as its equity partner, M3 Founder John McKibbon said in the statement. “Together, we look forward to propelling our innovation and growth to best serve our customers in an era of continued technological advancement.”
McKibbon established M3 in 1998 to address the accounting needs of his family’s hotel management company. The firm has since grown into a hospitality-focused, cloud-based back-office accounting software platform that serves as the system-of-record for financial data for hotel operators and management companies. The firm offers technological solutions, including accounting, labor management and business intelligence to over 8,000 hotels in North America.
After serving the hospitality industry for more than 25 years, M3 has a 95% retention rate and is used by more than 1,000 management groups and owners-operators and hotels.
“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,” said Ramzi Ramsey, a managing director at Blackstone.
A leading asset manager, Blackstone has more than $1 trillion in assets under management, including global investment strategies focused on real estate, private equity, infrastructure, life sciences, growth equity, credit, real assets, secondaries and hedge funds.
Carlton Fields, P.A., served as legal counsel to M3, while Houlihan Lokey provided 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.