OYO, the Indian travel tech platform, has agreed to acquire the Motel 6 and Studio 6 brands from Blackstone Real Estate for USD 525 million. This all-cash deal aims to expand OYO's presence in the US market as it prepares for its IPO. The acquisition includes G6 Hospitality, which manages nearly 1,500 hotels across the US and Canada. OYO plans to leverage its technology and marketing expertise to strengthen these iconic budget hotel chains while operating them as a separate entity. The transaction, expected to close in Q4 2024, marks a significant milestone for OYO's international growth and a successful exit for Blackstone, which more than tripled investors' capital during its ownership.
OYO, the Indian travel tech platform, has announced a significant acquisition as it prepares for its initial public offering. The company has agreed to purchase the iconic American budget hotel chains Motel 6 and Studio 6 from Blackstone Real Estate for USD 525 million in an all-cash deal. This move marks OYO's ambition to expand its presence in the United States.
The acquisition involves OYO's parent company, Oravel Stays, taking over G6 Hospitality, which owns and operates the Motel 6 and Studio 6 brands. The transaction is expected to be finalised in the fourth quarter of 2024, pending customary closing conditions. Motel 6's franchise network generates USD 1.7 billion in gross room revenues, providing a robust fee base and cash flow for G6. OYO plans to leverage its technology suite, global distribution network, and marketing expertise to strengthen these brands and drive financial growth. The company will operate G6 Hospitality as a separate entity.
OYO has been steadily growing its US presence since entering the market in 2019. It currently operates over 320 hotels across 35 states, having added nearly 100 hotels in 2023. The company aims to add approximately 250 more hotels to its US portfolio in 2024. Gautam Swaroop, CEO of OYO International, described the acquisition as a significant milestone for the startup, emphasising the combination of Motel 6's strong brand recognition and network with OYO's entrepreneurial spirit. Under Blackstone's ownership, significant capital was invested to enhance the Motel 6 brand and transform the business into a leading asset-light lodging company. The franchise network now includes close to 1,500 hotels across the US and Canada.
Julie Arrowsmith, CEO of G6 Hospitality, expressed optimism about the acquisition, noting that OYO's innovative approach to hospitality will allow them to enhance their offerings while maintaining the iconic Motel 6 brand that travellers have trusted for over six decades. Rob Harper, Head of Blackstone Real Estate Asset Management Americas, called the transaction a terrific outcome for investors. He stated that it culminated in an ambitious business plan that more than tripled investors' capital and generated over USD 1 billion in profit over the holding period.
Goldman Sachs & Co. LLC served as Blackstone's lead advisor, with Jones Lang LaSalle Securities, LLC and PJT Partners acting as financial advisors. Simpson Thacher & Bartlett LLP provided legal counsel to Blackstone for this transaction. This acquisition represents a strategic move for OYO as it seeks to solidify its position in the US market and prepare for its upcoming IPO.
OYO's acquisition of the Motel 6 and Studio 6 brands from Blackstone for USD 525 million marks a pivotal step in the company's expansion strategy within the US hospitality market. This move not only enhances OYO's portfolio but also leverages its technological and marketing strengths to drive growth. As OYO prepares for its initial public offering, this acquisition underscores its commitment to establishing a strong foothold in a competitive industry.
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