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U.S. hotel operator MCR Development said Monday that it would buy StayNTouch in a $46 million deal with cash and earnouts. The sale was prompted by President Trump’s executive order in March saying the company’s ownership by Chinese tech player Shiji Group could have threatened U.S. national security.

MCR, which calls itself the fifth-largest U.S. hotel owner-operator, oversees 92 properties. It intends to close the transaction later this month.

StayNTouch’s signature product is a cloud-based property management system, core software that lets hotel chains manage room availability, manage guest profile and transaction records, and check guests in and out of rooms using their smartphones.

The sale came after March’s executive order by President Trump, who said he had “credible evidence” that StayNTouch’s ownership by Beijing Shiji Information Technology might “impair the national security of the United States.” (Text, here.) The president’s order was vague on details about the threat. Beijing Shiji Information Technology is the largest provider of hotel and restaurant enterprise software in China. The U.S. government and the Chinese government have various taken actions against foreign ownership of multiple tech companies in recent years.

The New York-based MCR said it would invest $10 million over the next year in StayNTouch’s product development and technology, hire more sales and customer service employees, and use partnerships to expand its distribution globally.

MCR manages a mix of properties in 30 states and has been in the news for running the TWA Hotel that recently opened at New York City’s John. F. Kennedy International Airport, a 512-room property that runs on StayNTouch software. (See “TWA Hotel Looks to Stabilize After Rocky Takeoff.”

MCR, which has a $3 billion portfolio, said it will run StayNTouch as a wholly-owned subsidiary and is looking to refresh the brand’s executive leadership.

StayNTouch is primarily used by independent hotels and mid-market hotel brands. Subscribers to Skift Research can get context by reading The Hotel Property Management Systems Landscape 2020.

Shiji Group acquired StayNTouch in 2018. As Skift first reported, Shiji paid $33 million to buy out a remaining 77.4 percent stake in StayNTouch. The company had paid about $2 million for its earlier stake.

Shiji Group made StayNTouch the flagship service in its suite of international offerings for hoteliers. StayNTouch offers a cloud-based property management system, a core operational piece of software for hotels that helps managers track reservations and room inventory.

Shiji, the largest hospitality tech company in China, has been making a global hotel tech push since early 2018 after it announced a $486 million investment from e-commerce powerhouse Alibaba Group.

Shiji now serves many properties outside of China through about two dozen foreign subsidiaries. See our recent article: Shiji’s Hotel Tech Acquisition Spree: A Closer Look.

Photo Credit: The recently redeveloped TWA Hotel is owned by MCR Development, a U.S. hotelier that has just bought hotel tech firm StayNTouch. TWA Hotel is a 512-room property that runs on StayNTouch software. MCR