Oyo, the travel technology platform, is acquiring the American budget hotel chain Motel 6 and Studio 6 from Blackstone Real Estate for $525 million in an all-cash transaction. The deal is part of Oyo’s efforts to expand in the US.
The transaction will see Oravel Stays acquiring OG6 Hospitality, the economy lodging franchisor and parent company of Motel 6 and Studio 6 brands.
G6 Hospitality LLC has nearly 1,500 economy lodging locations under the Motel 6 brand and the Studio 6 Extended Stay brand in the United States and Canada. The transaction is expected to close in the fourth quarter of 2024.
A joint statement said that IPO-bound Oyo has steadily expanded its footprint in the US since its launch in the region in 2019 and currently operates over 320 hotels across 35 states.
In 2023, the platform added nearly 100 hotels to its portfolio there and it now aims to add close to 250 hotels in 2024.
Motel 6’s franchise network earns gross room revenues of $1.7 billion, which generates a strong cash flow for G6. Oyo is planning to leverage its comprehensive technology suite as well as its global distribution network and marketing expertise to further strengthen the Motel 6 and Studio 6 brands and drive continued financial growth.
“This acquisition is a significant milestone for a start-up 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, Oyo International.
It was in 2012 that Accor sold its United States Economy Hotels division to an affiliate of Blackstone Real Estate Partners VII for a total value of $1.9 billion.
“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 travelers have trusted for over six decades,’’ said Julie Arrowsmith, president and chief executive officer at G6 Hospitality, said.
Goldman Sachs LLC acted as Blackstone’s lead adviser and Jones Lang LaSalle Securities, LLC and PJT Partners acted as financial advisers.
Simpson Thacher & Bartlett LLP served as Blackstone’s legal adviser.
