Blackstone Inc. agreed to sell the company behind budget hotel brand Motel 6 to India’s OYO Hotels for $525 million in an all-cash deal.
Oravel Stays, the parent company of the global travel company OYO, announced that it has agreed to acquire G6 Hospitality, the leading economy lodging franchisor and parent company of the Motel 6 and Studio 6 brands, from Blackstone Real Estate for $525 million, in an all-cash transaction, according to a statement.
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 ~250 hotels in 2024. OYO will 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 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, President and 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.”
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.”
Oyo first expanded into the US in 2019 and now has more than 320 hotels across 35 states. G6 has a franchise network of roughly 1,500 locations in the US and Canada.
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.
*With Agency Inputs
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