News Mania Desk/ Piyal Chatterjee / 21st September 2024
As the Indian unicorn looks to expand in the US, the soon-to-be initial public offering (IPO) travel software platform OYO announced on Saturday that it has agreed to purchase the renowned American cheap hotel chain Motel 6 and Studio 6 brands from Blackstone Real Estate for $525 million in an all-cash transaction.
The parent company of OYO, Oravel Stays, announced that it has reached an agreement to purchase G6 Hospitality, the industry leader in low-cost accommodation franchising and the owner of Motel 6 and Studio 6, the chain’s subsidiary hotel brand.Subject to customary closing conditions, the deal is anticipated to close in the fourth quarter of 2024.
$1.7 billion in gross room sales are generated by the Motel 6 franchise network, providing G6 with a healthy fee base and cash flow. According to a statement from OYO, the company will use its extensive technology suite, worldwide distribution network, and marketing know-how to bolster the Motel 6 and Studio 6 brands and promote ongoing financial growth.
Since its introduction in the US in 2019, the travel tech platform has gradually increased its presence there, now running over 320 hotels in 35 states.
“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,” said Gautam Swaroop, CEO OYO International.
Under its ownership, Blackstone made large financial investments to build the Motel 6 brand and add value. It also carried out a plan to turn the firm into a top asset light lodging provider, with a network of around 1,500 franchised hotels in the US and Canada.”OYO’s innovative approach to hospitality will allow us to enhance our offerings and great value to our guests while maintaining the iconic Motel 6 brand that travelers have trusted for over six decades,” stated Julie Arrowsmith, Chief Executive Officer of G6 Hospitality.
“This transaction is a terrific outcome for investors and is the culmination of an ambitious business plan that more than tripled investors’ capital and generated over USD 1 billion,” stated Rob Harper, Head of Blackstone Real Estate Asset Management Americas.
Blackstone’s primary advisor was Goldman Sachs & Co. LLC; its financial advisors were Jones Lang LaSalle Securities, LLC and PJT Partners. Blackstone was advised by Simpson Thacher & Bartlett LLP regarding legal matters.
