SYDNEY, AUSTRALIA: SiteMinder Limited (ASX:SDR) has signed a Share Purchase Agreement to acquire GuestJoy, a highly rated suite of customer relationship management tools that helps hoteliers automate and digitise their guest communication, drive upsell revenues, and strengthen direct guest acquisition.

Founded by Alar Ülem and Annika Ülem in 2014, GuestJoy has gained a strong reputation in the industry for its ease of use and for delivering high ROI for its subscribers. GuestJoy’s customer base is today focused in the UK, Ireland and the Baltics, and prior to COVID was almost doubling in size every year.

As a pre-existing SiteMinder Partner, GuestJoy is already integrated into the SiteMinder ecosystem, allowing SiteMinder to deliver a fully integrated user experience following a short transition period.

The transaction consideration consists of an initial payment of €3.25m, and a further €1.75m subject to the completion of specified performance milestones within 24 months.

The transaction will be 100% equity funded via the issuance of additional shares. Completion of the transaction is expected during H1FY23. GuestJoy is not expected to have a material impact on SiteMinder’s financial performance in FY23.

SiteMinder plans to offer GuestJoy as an additional module in its subscription offering. GuestJoy will help strengthen the capabilities of the platform which will aid new business acquisition, and reduce churn.

Improving unit economics

SiteMinder is focused on delivering growth that is value accretive and will drive strong long term margins. The ratio of LTV to customer acquisition cost (CAC) underpins the Group’s investment decisions, and it looks to achieve LTV/CAC expansion by growing LTV through product attachment, and lowering CAC through economies of scale.

In FY22 the Group’s LTV/CAC improved from 2.1x to 3.2x, and exited the year at 3.9x in Q4FY22. CAC in FY22 remained elevated at $6,386 as the Group was impacted by COVID-19 disruptions for much of the year, and it invested in its go-to-market capacity to support future growth including the launch and scaling of its self-serve digital acquisition channel.