Indian startup company Oyo, preparing to go public, is expanding its business outside the country. The company is on the verge of executing a big deal in America, completely in cash.
Preparation To Buy This American Company
According to a report by news agency PTI, Oyo’s parent company, Oravel Stage, provided information about the proposed deal on Saturday. It said that it had agreed to buy American company G6 Hospitality. G6 Hospitality does business in America under the brand names Motel6 and Studio6. Motel6 and Studio6 are among the iconic budget hotel brands of America.
All-Cash Deal Of $525 Million
Oyo is buying both budget hotel brands from Blackstone Real Estate. According to the company’s information, this deal will be done entirely in cash for $525 million. It is expected to be completed in the last quarter of this year. Oyo says that after regulatory approvals, the deal can be completed between October and December 2024.
Doing Business In The US Since 2019
Oyo already has a strong presence in the US. The company entered the US market in 2019 and added about 100 new hotels last year. Currently, its network has more than 320 hotels in 35 US states, and the company plans to add about 250 hotels this year.
Oyo Expects To Benefit From The Deal
Hospitality startup Oyo believes that buying G6 Hospitality will help it significantly expand its scope in the US. G6 Hospitality earns huge profits from the franchise network of the Motel6 brand, which has earned the company $1.7 billion in gross room revenue. This brand has created a strong fee base for G6 Hospitality and benefits from good cash flow.
