Travel tech platform OYO is acquiring US-based G6 Hospitality, which runs budget hotel brands Motel 6 and Studio 6, from Blackstone Real Estate in a $525 million all-cash deal. The deal will boost OYO’s expansion in the US, a market where it has been building its presence for the past 5 years with a portfolio that currently spans over 320 hotels across 35 states.
The unicorn startup has been aggressively broadening its presence in the US, among its top 5 markets already. It plans to add another 250 hotels.
Besides, the acquisition will also allow OYO to gain a foothold in Canada where it manages some hotels which are reported under the US region.
G6 Hospitality runs about 1,500 economy lodging locations under the Motel 6 and the Studio 6 brands in the US and Canada. G6 Hospitality will continue to operate as a separate entity post the acquisition.
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OYO said it will build on this acquisition by leveraging its technology stack and global distribution network to further strengthen the Motel 6 and Studio 6 brands. Motel 6’s franchise network generates $1.7 billion in gross room revenues, providing G6 with a strong fee base and consistent cash flow.
The deal comes at a time when travelling has picked up globally following a pandemic-led slump. It has boosted businesses like Hospitality,
Gautam Swaroop, CEO at OYO International said in a statement, “This acquisition is a significant milestone for a startup company like us to strengthen our international presence.”
Under its ownership, Blackstone invested significant capital to build the Motel 6 brand and transformed the business into an asset light lodging company. Rob Harper, head of Blackstone Real Estate Asset Management Americas, “This transaction is a terrific outcome for investors and is the continuation of an ambitious business plan that more than tripled our investors’ capital and generated over $1 billion in profit over our hold period.”OYO led by Ritesh Agarwal has been delaying its public listing and plans to refile for IPO after refinancing its $450 million loan and posted its first ever profit of Rs 229 crore in FY 24.
