Oravel Stays, the parent company of global travel technology company Oyo, said it agreed to buy G6 Hospitality, a leading economy lodging franchisor and parent to the Motel 6 and Studio 6 brands, for $525 million in an all-cash deal from Blackstone Real Estate.
Oyo has been gradually, but increasingly, building its presence in the United States since it launched there in 2019. The company operates more than 320 hotels across 35 states. In 2023, it added nearly 100 hotels to its US portfolio and planned to add another 250 in 2024.
Gross room revenues generated by the franchise network of Motel 6 amount to $1.7 billion, which ultimately serves as a solid base for fee generation and cash flow for G6. “Oyo will leverage its portfolio of technologies along with its global distribution network and marketing acumen further to enhance the Motel 6 and Studio 6 brands as it brings the financial growth of those brands,” added the company.
“This acquisition marks a milestone in the journey of a startup like us to enhance its international footprint. Strong brand recognition, financial profile, and network of Motel 6 in the US, coupled with Oyo’s entrepreneurial spirit, will be integral to charting out a sustainable future path for the company, which will continue to remain as an independent unit,” said Gautam Swaroop, CEO of Oyo International.
Under Blackstone’s ownership, there has been a significant injection of capital to create value and expand the Motel 6 brand, including implementing a plan to transform the business into a premier asset-light lodging company with a franchise network of approximately 1500 hotels across the United States and Canada.
Julie Arrowsmith, CEO of G6 Hospitality, said, “We appreciate the success of our partnership with Blackstone and the transformation that has led us to this juncture. Oyo’s innovative approach to hospitality will enable us to enhance our offerings and great value to our guests while maintaining the iconic Motel 6 brand that travelers have trusted over six decades.”.
Per Rob Harper, Head of Blackstone Real Estate Asset Management Americas, “This transaction is a fantastic outcome for the investors and marks the high point of an aggressive business plan that more than tripled our investors’ capital and generated over $1 billion in profit over our hold period. We believe G6 is exceptionally well-positioned for the future and look forward to seeing its brands continue their success in the years ahead.”.
The closing is expected to occur in the fourth quarter of 2024, subject to customary closing conditions.
Goldman Sachs & Co. LLC served as lead advisor to Blackstone, while financial advisers included Jones Lang LaSalle Securities, LLC, and PJT Partners. Simpson Thacher & Bartlett LLP acted as legal advisor to Blackstone.
