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Oyo, the Indian hospitality startup, has announced a significant move in its global expansion strategy with the acquisition of G6 Hospitality, the parent company of the iconic Motel 6 and Studio 6 brands, from Blackstone Real Estate. This all-cash deal, valued at $525 million, marks a major step for Oyo in solidifying its presence in the US market, a region where it has been actively building its portfolio since 2019. Currently, Oyo operates over 320 hotels across 35 states in the US, and plans are in place to add another 250 hotels to its portfolio by the end of the year.
The acquisition is poised to bring a strategic advantage to Oyo, allowing it to leverage its technology stack and global distribution network to enhance the Motel 6 and Studio 6 brands. The acquisition is particularly noteworthy considering Motel 6's existing franchise network generates a substantial $1.7 billion in gross room revenues, providing a healthy fee base and cash flow for G6. Gautam Swaroop, CEO of Oyo International, highlights the significance of the deal, stating that it represents a major milestone for Oyo in strengthening its international presence. He emphasizes the strategic combination of Motel 6's strong brand recognition, financial profile, and US network with Oyo's entrepreneurial spirit, ultimately contributing to a sustainable path forward for the company.
Blackstone, under its ownership of G6 Hospitality, played a pivotal role in investing substantial capital to build the Motel 6 brand. This investment led to a transformation of the business into an asset-light lodging company, resulting in a franchise network encompassing approximately 1,500 hotels across the US and Canada. Rob Harper, Head of Blackstone Real Estate Asset Management Americas, underscores the successful outcome of the transaction for investors, highlighting the significant capital growth and profit generated during their hold period. He expresses confidence in G6's future prospects, anticipating continued success for the Motel 6 and Studio 6 brands in the coming years. The transaction is expected to close in the fourth quarter of 2024, marking a significant milestone for both Oyo and the hospitality industry.
Source: Oyo to acquire G6 Hospitality from Blackstone Real Estate in a $525 million deal