US-based hospitality startup, G6 Hospitality is expected to get acquired for $525 million by the hospitality major, OYO. The company signed an agreement to buy its stakes in the startup through an all-cash transaction deal. This investment will enable both companies to combine resources and improve hospitality compatibility while increasing their client base.
G6 Hospitality is a parent company of Motel 6 and offers hotels and transportation services. The Studio 6 and Motel 6 brands were acquired by Blackstone for $1.9 billion from the French hotel company, Accor in 2012. The Motel6 operates over 1,450 hotels across Canada and the US. Studio 6 claims to have around 200 properties.
The deal is expected to close by the last quarter of 2024 after the hospitality major acquire the firm from Blackstone Real Estate. The agreement includes both the subsidiaries Motel 6 and Studio 6. The startup already has a strong market presence in the hospitality sector and it expects to close the deal in the last quarter of this year. The company focuses on merging businesses and bringing their technologies, clients, and solutions together.
The acquisition will help Oyo enhance its capability by integrating G6 hospitality’s clients, network, and strategy. Oyo is an online booking platform that allows users to register for transportation or accommodation in various locations. The hospitality startup secured around 3.41 billion USD across nineteen funding rounds since its inception, including $175 million raised from InCred Wealth and others during its series G funding round. The company also plans to refile its draft IPO paper. After this deal, the companies will have increased resources and a larger workforce. OYO competes with other companies in the same segment such as Treebo, and RedDoorz.
Entrackr reported that Motel 6’s franchise network generated around 1.7 billion annual gross revenue. Oyo launched around 100 properties in the US last year. The firm aims to add 250 more in the ongoing calendar year. Oyo reported a 1.4 percent decrease in operational revenue to Rs 5,389 crore in FY24. However, the profit after tax was around Rs 239 crore in the same duration. The company plans to maintain its profits by minimizing its employee benefits. Oyo acquired G6 Hospitality to strengthen its position in the hospitality sector while offering innovative solutions.
Conclusion :
Oyo announced its plans to acquire the operator of Motel6 and Studio6, G6 hospitality for $525 million through an all-cash transaction deal. The acquisition was a part of the firm’s plan to strengthen its presence in the hospitality sector. This investment is an initiative to merge the companies to introduce more innovative hospitality solutions.
The hospitality major focuses on expanding its services. This acquisition will enable Oyo to enter the European hospitality market and enhance its services. The development came just after OYO closed its $175 million funding round from Incred and other investors. Oyo has made various acquisitions in the last few years to expand its business in the US and Canadian markets.
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