Hotel booking software platform SiteMinder lodged its prospectus today confirming it wants to raise over $600M with its IPO. That means it will start trading as a public company having established the coveted unicorn valuation north of a billion dollars from the get-go.
(Its private backers argue it has been there since January, but at Digital Nation we are a little more discerning about letting new members into the club.)
Shares are expected to begin trading on the ASX on a normal settlement basis on November 10.
The business already operates in 150 countries and has six global sales hubs. It operates largely on a subscription-based business model that delivers the kind of recurring revenues investors tend to favour in platform businesses. In FY21, 83 per cent of its total pro forma revenue came from recurring subscription fees, with the balance from transaction fees from its subscriber properties.
Goldman Sachs, UBS, and BarrenJoey have underwritten the IPO to the tune of $627 million which translates into a market capitalisation close to $1.3 Billion — representing a valuation of 12.5 times revenue.
According to the prospectus, SiteMinder will list with an offer price of $5.06 per share.
The IPO also suggests confidence is returning to the travel sector as the first hints of post-pandemic tourism start to emerge. Australia crossed the crucial 70 per cent double vaccination threshold this week, a key milestone to re-opening internal borders and re-energising the wider economy. NSW, the largest state has already reached 80 per cent.
SiteMinder Chairman Pat O'Sullivan addressed the pandemic concerns in his comments in the prospectus.
"We are under no illusion about the impact that COVID-19 has had on the travel industry in which we operate. But the impact on us has not been as pronounced as the impact on the rest of the global travel sector, primarily due to our predominantly subscription-based revenue model, the strategic investments in both our go to market sales functions and product offerings over the past year, and the overall resilience we have shown during a trying time."
SiteMinder is betting that the more than one million independent hotel operators worldwide will want to transition from manual or at least unsophisticated technology solutions to manage bookings, rates and availability, reflecting the acceleration of digitalisation seen in other markets.
And CEO Sankar Narayen suggests in his comments in the prospectus that they may not have a choice. "Our research has found that consumers will not accept lower standards in their hotel accommodation despite the challenges faced by the hotel industry over the past 18 months."
Instead, he argued, customer needs are growing at an alarming pace.
There are of course some key risks, COVID chief amongst them. But as a platform business SiteMinder also has some specific digital concerns. It lists the performance of technology systems, breaches — and regulation — around data security and privacy, and cybersecurity generally, are highlighted in the listing document.
SiteMinder has also today formally appointed Pat O'Sullivan and Jennifer Macdonald as independent, non-executive directors.
O'Sullivan is assuming the role of independent chair, having held roles at Optus, Nine Entertainment and is currently on the board of listed carsales.com, Afterpay and TechnologyOne.
Macdonald is assuming the role of audit and risk committee chair, bringing experience from board positions at Bapcor, Redbubble, Australian Pharmaceutical Industries and Healius.
According to Narayan, “We are excited to welcome two very accomplished independent directors to our Board. Their wealth of experience in public company leadership, coupled with their financial expertise, deep market knowledge and industry acumen, will only further strengthen our Board. Additionally, their diverse experience and strategic direction will be of immense value as we continue to be resolute in our vision to support the changing needs of our customers as the travel market evolves.”