A roadside chain for more than 50 years, Motel 6 was owned by Blackstone, the private equity giant. Oyo will pay $525 million in an all-cash deal.
Motel 6, the budget hotel chain that has lined American highways for decades, will be sold to Oyo, an India-based hotel operator, the companies announced on Friday.
Blackstone, the private equity giant and the owner of Motel 6’s parent company, said the transaction would be an all-cash deal for $525 million. The deal is expected to close before the end of the year, and would include the chain’s offshoot hotel brand, Studio 6.
Oyo expanded into the United States in 2019, and has recently ramped up efforts to expand further. It currently operates more than 300 hotels domestically. The company, which specializes in budget hotels and proudly describes itself as “a start-up,” had received a large investment from SoftBank. But some troubling incidents in India in recent years raised questions about some of its business practices.
Motel 6 was founded in 1962 in Santa Barbara, Calif., and has been an indelible part of Americana for its basic accommodations. The Motel 6 name originally came from the company’s offering of an all-cash $6-a-night rate. Motel 6 and Studio 6 currently have roughly 1,500 hotels across the United States and Canada, Blackstone said.
Gautam Swaroop, the chief executive of Oyo International, praised Motel 6’s “strong brand recognition, financial profile and network in the U.S.” He added, “This acquisition is a significant milestone for a start-up company like us to strengthen our international presence.”
Blackstone purchased Motel 6 in 2012 for $1.9 billion.
“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,” Rob Harper, a senior managing director at Blackstone, said in a statement.
Source: Elections - nytimes.com
