Oyo to expand US market with $525 mn purchase of hotel chain

Budget motel chain Motel 6 is being acquired by the parent company of Oyo. The New York-based investment firm Blackstone, which owns Motel 6’s parent company G6 Hospitality, announced that the deal would be an all-cash transaction worth $525 million.

The transaction will also include the sale of the Studio 6 motel brand, which caters to customers seeking extended stays. The deal is expected to close by the end of the year.

Oyo, which launched in India just over a decade ago, has been expanding its footprint in the US over the past few years. The company says it currently operates 320 hotels across 35 states and is aiming to add 250 more this year.

“This acquisition is a significant milestone for a startup company like us to strengthen our international presence,” Gautam Swaroop, OYO’s international division chief, said in a statement. Blackstone had purchased Motel 6 and Studio 6 in 2012 for $1.9 billion. Since then, the private equity giant says it has heavily invested in the brand and pursued a strategy that converted the chain into a franchise.

“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, said in a statement.

Under the deal, Oravel Stays, which owns Oyo, will acquire G6 Hospitality.

Julie Arrowsmith, Chief Executive Officer at G6 Hospitality said: “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.”