 "Oyo buys leading US hotel chain G6 Hospitality from Blackstone for $525mn")
Oravel Stays, the parent company of the global travel technology company Oyo, on Saturday announced that it has agreed to acquire G6 Hospitality, the leading economy lodging franchisor and parent company of Motel 6 and Studio 6 brands, from Blackstone Real Estate for $525 million, in an all-cash transaction.
Oyo has steadily expanded its footprint in the United States since its launch in the region in 2019, and currently operates over 320 hotels across 35 states.
In 2023, Oyo added nearly 100 hotels to its US portfolio and aims to add another 250 hotels in 2024.
Motel 6’s franchise network produces gross room revenues of $1.7 billion, which generates a strong fee base and cash flow for G6. Oyo will leverage its 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, said the company.
“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 Oyo International.
Under its ownership, Blackstone invested significant capital to create value and enhance the Motel 6 brand, including executing a strategy to transform the business into a leading asset light lodging company with a franchise network of ~1500 hotels across the United States and Canada.
Julie Arrowsmith, Chief Executive Officer at G6 Hospitality, said, “We are grateful for our successful partnership with Blackstone and the transformation that has positioned us well for this new chapter. 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.”
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Rob Harper, Head of Blackstone Real Estate Asset Management Americas, said, “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.”
The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions.
Goldman Sachs & Co. LLC acted as Blackstone’s lead advisor and Jones Lang LaSalle Securities, LLC and PJT Partners acted as financial advisors. Simpson Thacher & Bartlett LLP served as Blackstone’s legal advisor.