Oravel Stays, the parent company of Indian budget hotel chain OYO, has agreed to acquire American lodging franchisor G6 Hospitality for about $525 million, according to an announcement.
G6 Hospitality is the parent company of the iconic Motel 6 and Studio 6 brands. The network comprises nearly 1,500 economy lodging locations in the US and Canada and generates $1.7 billion in gross room revenue.
The motels are generally close to airports, freeways, and other thoroughfares. Studio 6 includes more than 200 properties, in places like Atlanta, Dallas, Houston, Seattle, and Canada.
OYO said it will acquire G6 Hospitality from Blackstone Real Estate in an all-cash transaction. The deal is expected to close in the fourth quarter of this year, subject to customary closing conditions.
“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 for the company,” said Gautam Swaroop, CEO of OYO International.
Blackstone purchased G6 in 2012 for $1.9 billion and it has since generated “over $1 billion in profit,” 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,” Harper said.
The acquisition comes about a month after OYO raised $173.5 million in Series G funding that lowered its valuation to $2.5 billion. The SoftBank-backed company was once valued at $10 billion.
OYO, which faced internal turmoil and layoffs in the past months, withdrew its draft papers (DRHP) for an initial public offering (IPO) from the Securities and Exchange Board of India (SEBI) for the second time in May.
The company had initially filed to go public in October 2021 for about $1 billion but delayed the share sale due to bleak market conditions. On March 31, 2023, it submitted a confidential “pre-filing” document for a reportedly trimmed-down IPO.
