Indian startup OYO, founded in 2013, will acquire G6 Hospitality, owner of Motel 6 and Studio 6 in the United States, by the end of the year. In an all-cash transaction, the startup will pay a down payment of $525 million, a deal that will allow OYO to expand in the United States.
“This acquisition is a significant milestone for a start-up like ours, which is looking to strengthen its international presence,” said Gautam Swaroop, CEO, OYO. “Motel 6’s strong brand awareness, financial profile and network in the US, combined with OYO’s entrepreneurial spirit, will help chart a sustainable path for the company, which will continue to operate as a separate entity.”
OYO made its debut in the US in 2019, where it currently operates 320 properties in 35 states. By the end of 2024, it is expected to open 250 more. The Indian startup has recently embarked on an international expansion mission. March 31st In 2024, it manages 18,103 hotels worldwide, 5,165 more than a year earlier.
By acquiring G6 Hospitality, which specializes in budget accommodation, the start-up will nevertheless experience a real scale-up, particularly in the United States. Motel 6 and Studio 6 share 1,500 establishments in the United States and Canada, many of which are managed as franchises. This low-capitalization operation generates $1.7 billion in annual revenue.
“This transaction is a tremendous result for investors and represents the culmination of an ambitious business plan that has more than tripled our investors’ capital and generated over $1 billion in earnings during our ownership period,” Rob Harper, head of Blackstone Real Estate Asset Management Americas, which currently owns G6 Hospitality, said in a statement.
Even if customary closing conditions apply, the transaction is expected to close by the end of the last quarter of 2024.
“We are grateful for our successful partnership with Blackstone and the transformation that has positioned us well for this next chapter. OYO’s innovative approach to hospitality will enable us to enhance our offerings and deliver value to our guests while preserving the iconic Motel 6 brand that travelers have trusted for more than six decades,” said Julie Arrowsmith, President and CEO of G6 Hospitality.
