Oyo’s parent company Oravel Stays has agreed to acquire US budget hotel chain G6 Hospitality, which owns the “iconic” Motel 6 and Studio 6 brands, from Blackstone Real Estate in an all-cash deal worth $525 million, PTI reported.
The move comes ahead of Oyo’s plans for a possible IPO and as the company looks to expand in the United States, it said, adding that the deal could close in the fourth quarter of 2024, depending on conditions.
US Expansion
The report also said that Oyo has been “steadily” expanding its U.S. operations since its founding in 2019 and now operates more than 320 hotels in 35 states. In 2023 alone, the company added nearly 100 such hotels and plans to add another 250 hotels in 2024.
“For a startup like us, this acquisition is an important milestone in strengthening our international presence,” Gautam Swaroop, CEO of OYO International, said in a press release. “Motel 6’s strong brand recognition, financial position and network in the US, coupled with OYO’s entrepreneurial spirit, will help chart a sustainable path for the company, which will continue to operate as an independent entity.”
About G6 Hotel Brand
Oyo disclosed in a press release that Motel 6 franchised hotels generated $1.7 billion in gross room revenue and provided G6 Hospitality with a strong expense base and cash flow.
Oyo will “leverage its comprehensive technology suite and global distribution network and marketing expertise” to continue to strengthen Motel 6 and Studio 6 “and drive continued financial growth,” the company added.
As owner Blackstone put it, it invested “substantial capital” to create value for the Motel 6 brand and transform it into a franchise of nearly 1,500 hotels in Canada and the United States.
Julie Arrowsmith, CEO of G6 Hospitality, said Oyo’s “innovative approach to hospitality” will allow the company to provide value to guests and maintain the “iconic Motel 6 brand that travelers have trusted for more than six decades.”
Goldman Sachs & Co. served as lead advisor to Blackstone, while Jones Lang LaSalle Securities LLC and PJT Partners served as financial advisors. The report also said that Simpson Thacher & Bartlett LLP served as legal advisor to Blackstone.
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