Budget hotel company Oyo has reached a deal to acquire US-based G6 Hospitality, which operates Motel 6, in an all-cash $525 million deal.
The transaction will be finalised by the fourth quarter of 2024 for the acquisition which also includes the Studio 6 extended stay brand.
The Indian start-up opened its first US location in 2019 and currently operates more than 320 hotels across 35 states. The firm has footprints across 35 countries with access to patrons of over 175,000 hotels and other premises in India, Europe, and southeast Asia.
With the deal, Oyo is poised to substantially expand its North American footprint. Motel 6 has been known as the best-known budget motel brand in the country, with a franchise network of around 1,500 locations in the US and Canada.
"This acquisition is a significant milestone for a startup company like us to strengthen our international presence," Oyo International CEO Gautum Swaroop in a statement said. Motel 6 will continue to operate as a separate entity, he added.
SoftBank-backed Oyo's was valued at $10 billion in 2019, but suffered a major slump during and after the COVID pandemic when demand for hotels nosedived.
At one point, the 2012-founded company's valuation was said to have fallen to $2.5 billion. However, Oyo denied reporting about its lowered valuation.
Motel 6, founded in 1962, popularised the budget motel concept, offering rooms at $6 a night. It was eventually acquired by Blackstone for $1.9 billion in 2012.
"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," said Julie Arrowsmith, President and CEO, G6 Hospitality.
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