Oravel Stays, the parent company of the global travel technology company OYO, has agreed to acquire G6 Hospitality, an economy lodging franchisor and the parent company of the iconic Motel 6 and Studio 6 brands, from Blackstone Real Estate for $525 million, in an all-cash transaction.
G6 Hospitality has nearly 1,500 economy lodging locations under the Motel 6 brand and the Studio 6 extended stay brand in the United States and Canada.
OYO plans to use its comprehensive technology suite, global distribution network, and marketing expertise to elevate the Motel 6 and Studio 6 brands. The aim is to drive sustained financial growth and expand their market presence.
The deal is expected to be finalised in the fourth quarter of 2024.
Gautam Swaroop, CEO of OYO International, said this acquisition is a significant milestone for the startup to strengthen its 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,” he said.
According to a statement from Blackstone Real Estate, OYO has steadily grown its presence in the United States since it entered the market in 2019, and now operates more than 320 hotels across 35 states. In 2023, OYO added nearly 100 hotels to its US portfolio and it plans to add around 250 hotels in 2024.
Motel 6’s franchise network generates gross room revenues of $1.7 billion, providing G6 with a solid fee base and robust cash flow, said the statement.
Julie Arrowsmith, President and CEO of G6 Hospitality, expressed gratitude for the successful partnership with Blackstone, highlighting how it has effectively positioned the company for its next chapter.
“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 travellers have trusted for over six decades,” she said.
Rob Harper, Head of Blackstone Real Estate Asset Management Americas, said, “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. We believe G6 is extremely well-positioned for the future and we look forward to seeing its brands continue their success in the years to come.”
Under its ownership, Blackstone invested significant capital to enhance the Motel 6 brand, including executing a strategy to transform the business into a leading asset-light lodging company with a franchise network of ~1,500 hotels across the United States and Canada, the statement noted.
Goldman Sachs & Co. LLC acted as Blackstone’s lead advisor, and Jones Lang LaSalle Securities, LLC and PJT Partners were the financial advisors in the deal. Simpson Thacher & Bartlett LLP served as Blackstone’s legal advisor.
Last month, OYO raised Rs 1,457 crore from a consortium of investors in the latest funding round. The IPO-bound unicorn raised nearly Rs 1,040 crore in the Series G funding round. This followed an earlier raise of Rs 416.85 crore in the same series and concluded the round.
