The Indian hospitality startup OYO, established in 2013, will be buying G6 Hospitality, the 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 put down a payment of 525 million dollars in a transaction which will allow for OYO to scale up in the United States.
“This acquisition is a significant milestone for a startup company like us to strengthen our international presence,” said Gautam Swaroop, the CEO of OYO. “Motel 6′s strong brand recognition, financial profile and network in the U.S., 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.”
OYO first set foot in the US in 2019, where it currently manages 320 properties across 35 states. By the end of 2024, an additional 250 are set to open. The Indian startup has recently gone on an international expansion mission. On March 31st 2024, it managed 18.103 hotels worldwide, 5.165 more than a year before.
However, by buying G6 Hospitality, which focuses on budget accommodation, the startup will nonetheless be going through a real scale-up, especially in the United States. Motel 6 and Studio 6 share 1.500 locations across the U.S. and Canada, many of which are managed as a franchise. The asset-light operation creates 1,7 billion dollars in revenue on a yearly basis.
“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,” Rob Harper, the head of Blackstone Real Estate Asset Management Americas which currently owns G6 Hospitality, said in a statement.
Even though the usual closing conditions apply, the deal is set to go through 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 new 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”, Julie Arrowsmith, President and Chief Executive Officer at G6 Hospitality, stated.