Oravel Stays, the parent company of the global travel technology firm OYO, announced on Saturday that it is acquiring US-based G6 Hospitality from Blackstone Real Estate for $525 million in an all-cash deal. The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions.
G6 Hospitality, a leading economy lodging franchisor, is the parent company of the well-known Motel 6 and Studio 6 brands. The franchise network of Motel 6 generates gross room revenues of $1.7 billion, which provides a strong fee base and cash flow for G6.
OYO has been expanding its presence in the United States since its launch in the region in 2019. The company currently operates over 320 hotels across 35 states. In 2023, OYO added nearly 100 hotels to its US portfolio and aims to add 250 more by 2024.
“This acquisition is a significant milestone for a startup company like us to strengthen our international presence. 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,” said Gautam Swaroop, CEO of OYO International.
Under Blackstone’s ownership, substantial capital was invested to create value and enhance the Motel 6 brand, transforming the business into a leading asset-light lodging company with a franchise network of 1,500 hotels across the United States and Canada.
Rob Harper, Head of Blackstone Real Estate Asset Management Americas, stated, “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.”
This acquisition comes just a month after OYO reported its first-ever annual profit after tax (PAT) of ₹229 crores for FY24. OYO's Adjusted EBITDA grew by 215% to reach ₹877 crores in FY24, up from ₹277 crores in FY23.
The company also recently raised ₹1,457 crores from a consortium of investors in its latest funding round, giving OYO a valuation of $2.4 billion. This funding came shortly after the company decided to withdraw its initial public offering (IPO) papers for the second time.