Skift Take
The short-term goal of the deals is to win more work from hotel management companies. The long-term goal is to sell the combined portfolio. We look at the merits of Accel-KKR-owned Cendyn's acquisition of Rainmaker. We also look at potential acquisition targets.
Buyout firm Accel-KKR is rolling up hotel technology vendors. It needs to find bargains, given the high valuations for the bigger businesses it more typically buys. So it's looking to build scale with mid-market companies showing revenues of between $5 million and $200 million. Mid-market firms often sell for lower prices relative to their earnings.
Like with any private equity firm, the goal is an eventual exit with a big profit. Accel-KKR's trajectory so far offers interesting insights into an increasingly important segment of the hospitality sector.
Here's a timeline of Accel-KKR's hotel tech deals. We follow that with our best guesses on who the equity firm might invest in next while analyzing the firm's latest deal, too.
In June, Accel-KKR became a majority owner of Cendyn Group, a hotel marketer based in Boca Raton, Florida. This month it supported Cendyn's acquisition of Rainmaker, a hotel revenue management service, for an undisclosed price.
Meanwhile, in February, Accel-KKR underwrote the merger of Travel Tripper and Pegasus. The companies help hotels take bookings on their websites and do related marketing work.
Accel-KKR began this phase of hotel tech investment in 2016, when it took a minority stake in Cendyn. It also helped the company acquire GuestFolio, a Canadian rival.
Seeking Mid-Market Magic
Consolidation of sectors with small players is part of Accel-KKR's playbook, with more acquisitions coming, said executives at the firm's recently acquired hotel tech vendors.
In hotel tech, heft brings a perk, the attention of hotel management companies. Each of these hotel management companies runs many properties, sometimes as franchisees.
Hotel companies once saw sales, marketing, and revenue management as siloed efforts. The teams bought software for each need. But now those silos are breaking down.
"When we go in for meetings to sell CRM [customer relationship management], we increasingly see sales and marketing managers along with the revenue manage
