Oyo's parent, Oravel Stays, has agreed to acquire American budget hotel chain G6 Hospitality, owner of the “iconic” Motel 6 and Studio 6 brands, from Blackstone Real Estate in a $525 million all-cash deal, PTI reported.
The move comes ahead of Oyo's likely IPO plans and as the company looks to expand in the United States, it said, adding, that the deal is likely to close in Q4 of CY2024, subject to conditions.
The report added that Oyo has expanded its US footprint “steadily” since 2019 launch and now operates more than 320 hotels in the country across 35 states. It added close to 100 of these hotels in 2023 alone, and aims to increase the number by another 250 hotels in 2024.
“This acquisition is a significant milestone for a startup company like us to strengthen our international presence. Motel 6's strong brand recognition, financial profile and network in the US, combined with OYO's entrepreneurial spirit will be instrumental in charting a sustainable path forward for the company which will continue to operate as a separate entity,” Gautam Swaroop, CEO of OYO International said in the release.
The Motel 6 franchise generates $1.7 billion in gross room revenue, and supports a strong fee base and cash flow for G6 Hospitality, Oyo informed in a release.
It added that Oyo will “leverage its comprehensive technology suite and global distribution network and marketing expertise” to continue strengthening Motel 6 and Studio 6, “and drive continued financial growth”.
As owner Blackstone said it invested “significant capital” to create value for the Motel 6 brand and transform the business into a franchise of nearly 1,500 hotels in Canada and the US.
Julie Arrowsmith, CEO of G6 Hospitality said that Oyo's “innovative approach to hospitality” would allow the company to offer value for guests and maintain the “iconic Motel 6 brand that travellers have trusted for over six decades”.
Goldman Sachs & Co. LLC acted as Blackstone's lead advisor and Jones Lang LaSalle Securities, LLC and PJT Partners acted as financial advisors. Simpson Thacher & Bartlett LLP served as Blackstone's legal advisor, the report added.
(With inputs from PTI)
