Hospitality major Oyo plans to acquire major chains of budget motels in the U.S., Motel 6 and Studio 6, for a sum of $525 million (about Rs 4,380 crore) from Blackstone as the unicorn eyes further international expansion.
For the deal, Oyo's parent Oravel Stays has agreed to acquire G6 Hospitality, the parent company of the Motel 6 and Studio 6 brands, from Blackstone Real Estate in an all-cash transaction, according to a statement.
The transaction will add 1,500 motels and gross room revenues of $1.7 billion to Oyo's kitty. Pre-deal, Oyo operated only about 320 hotels across 35 states in the U.S.
Apart from the motel chains, Oyo aims to add roughly 250 additional hotels in 2024. "This acquisition is a significant milestone for a startup company like us to strengthen our international presence," said Gautam Swaroop, CEO, OYO International, adding that the motels will continue to be operated under a separate entity.
"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, Head of Blackstone Real Estate Asset Management Americas, said.
Blackstone had acquired G6 in 2012.
The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions.
Oyo has been on an international buying spree in the recent past. It had acquired Checkmyguest in France in FY24 and also invested about Rs 450 crore in Denmark. Oyo is also now the largest value hotel platform in Indonesia.
In FY24, Oyo reported its first-ever profit after tax, coming in at Rs 229 crore. It made the profit due to a reduction in general and administrative spend and optimisation of marketing spends, as costs decreased by 13% to Rs 4,500 crore from Rs 5,207 crore, despite revenue remaining flat over the previous year.
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