Oyo buys US motel chain G6 from Blackstone for $525 million

Oravel Stays, the parent of global travel technology firm OYO, has agreed to acquire leading US motel chain G6 from Blackstone Real Estate for $525 million in an all-cash deal.

Based out of Gurugram, OYO will take over G6 Hospitality, the umbrella brand that includes Motel 6 and Studio 6, but the companies will remain separate, it said.

“The acquisition is a significant milestone for a startup company like us to strengthen our international presence,” Gautam Swaroop, chief executive officer (CEO) at OYO International, said in a press release.

“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.”

OYO has steadily expanded its footprint in the US since its launch in the region in 2019 and currently operates more than 320 hotels across 35 states.

In 2023, OYO added about 100 hotels to its US portfolio and aims to add 250 hotels this year.

Motel 6’s franchise network delivers revenues of $1.7 billion.

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, the statement said.

Julie Arrowsmith, president and CEO at G6 Hospitality, said, “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.”

The transaction is expected to close in the fourth quarter of 2024.

Goldman Sachs and Co. acted as Blackstone’s lead advisor and Jones Lang LaSalle Securities, LLC and PJT Partners acted as financial advisors. Simpson Thacher and Bartlett LLP served as Blackstone’s legal advisor.