OYO to Acquire G6 Hospitality from Blackstone Real Estate for $525 Million
- ByStartupStory | September 21, 2024
Oravel Stays, the parent company of global travel technology firm OYO, has entered into an agreement to acquire G6 Hospitality, the parent company of the renowned Motel 6 and Studio 6 brands, from Blackstone Real Estate in an all-cash deal valued at $525 million. This acquisition, expected to be finalized in the fourth quarter of 2024, marks a significant milestone for OYO as it continues to strengthen its international footprint.
G6 Hospitality boasts a vast portfolio of nearly 1,500 economy lodging locations, with Motel 6 and Studio 6 brands operating across the United States and Canada. OYO plans to leverage its extensive technology suite, global distribution network, and marketing expertise to enhance the Motel 6 and Studio 6 brands. The acquisition aims to drive financial growth while expanding the brands’ presence in the market.
Gautam Swaroop, CEO of OYO International, highlighted the importance of this acquisition for OYO’s global expansion strategy. “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.
OYO, which entered the US market in 2019, currently operates over 320 hotels across 35 states. In 2023, the company added close to 100 hotels to its US portfolio and plans to add around 250 more in 2024. The acquisition will further solidify OYO’s position in the US economy lodging sector.
G6 Hospitality generates gross room revenues of $1.7 billion annually through its franchise network, providing a steady base of fees and strong cash flow, according to a statement from Blackstone Real Estate. Julie Arrowsmith, President and CEO of G6 Hospitality, expressed her appreciation for Blackstone’s partnership, noting that the firm has helped position the company for future growth. “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.
Blackstone Real Estate, which has owned G6 Hospitality since 2012, has significantly transformed the business, focusing on an asset-light model and investing heavily in brand enhancements. Rob Harper, Head of Blackstone Real Estate Asset Management Americas, noted the financial success of the transaction, stating, “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.”
The acquisition was supported by Goldman Sachs & Co. LLC, who acted as Blackstone’s lead advisor, while Jones Lang LaSalle Securities, LLC and PJT Partners provided financial advice. Simpson Thacher & Bartlett LLP served as Blackstone’s legal advisor in the transaction.
OYO recently raised Rs 1,457 crore in a Series G funding round from a consortium of investors, strengthening its financial position ahead of its planned IPO.
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