The deal includes Motel 6 and Studio 6 brands, with G6 continuing as a separate entity while Oyo leverages its technology to strengthen these brands. MUMBAI: 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 startup said on Saturday. The deal will boost Oyo's expansion in the US, a market where it has been building its presence since the past five 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 five markets already, and plans to add another 250 hotels in the region this year. Besides, the acquisition will also allow Oyo to gain a foothold in Canada where it manages some hotels and which is 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. Oyo said that 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 produces gross room revenues of $1.
7 billion, generating a healthy fee base and cash flow for G6. The deal comes at a time when travelling has picked up globally following a pandemic led slump, boosting businesses like hospitality. "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 at Oyo International said in a statement. Under its ownership, Blackstone invested significant capital to build the Motel 6 brand and transformed the business into an asset light lodging company. "This transaction is a terrific outcome for investors and is the culmination of an ambitious business plan that more than tripled our investors' capital and generated over $1 billion in profit over our hold period," said Rob Harper, head of Blackstone Real Estate Asset Management Americas.
Ritesh Agarwal led Oyo which has been delaying its public listing and plans to refile for IPO after refinancing its $450 million loan posted its first ever profit of Rs 229 crore in FY24..
