INDIA-BASED ORAVEL Stays, the parent company of the global travel technology company OYO, has agreed to purchase G6 Hospitality, franchiser for the economy Motel 6 and Studio 6 brands, for $525 million from Blackstone Real Estate. The all-cash transaction is expected to close in the fourth quarter, subject to customary closing conditions.
Since launching in the U.S. in 2019, OYO has expanded to operate more than 320 hotels across 35 states, according to a joint statement from the companies. It aims to add around 250 hotels to its network this year, offering a technology suite, global distribution network and marketing expertise.
"This acquisition is a significant milestone for a startup company like us to strengthen our international presence,” said Gautam Swaroop, CEO of OYO International. “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."
Motel 6’s franchise network of around1,500 hotels across the U.S. and Canada produces gross room revenues of $1.7 billion, which generates a strong fee base and cash flow for G6. Blackstone invested capital to enhance the brand, including executing a strategy to transform the business into an asset light lodging company.
"We are grateful for our successful partnership with Blackstone and the transformation that has positioned us well for this new chapter,” said Julie Arrowsmith, president and CEO at G6. “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."
Rob Harper, head of Blackstone Real Estate Asset Management Americas, said the transaction is the culmination of a business plan that more than tripled investors’ capital and generated more than $1 billion in profit over Blackstone’s 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," he said.
In August, Blackstone Growth LP and AAHOA announced they had signed a definitive agreement to acquire a majority stake in M3 LLC, a hospitality accounting software firm. It is AAHOA’s first strategic investment and the association claims the deal will significantly benefit its members and the entire hospitality industry.
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.
