Oravel Stays, the parent company of travel technology company OYO, has entered an agreement to acquire G6 Hospitality, which is known for its Motel 6 and Studio 6 budget hotel brands, from Blackstone Real Estate.

The all-cash deal is valued at around $525m.

This deal is expected to complete in the fourth quarter of this year and is currently subject to the receipt of certain closing conditions.

Oravel Stays said it plans to maintain Motel 6 as an independent entity post-acquisition.

OYO International CEO Gautam Swaroop said: “This acquisition is a significant milestone for a startup company like us to strengthen our international presence.

“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 which will continue to operate as a separate entity.”

Since its US launch in 2019, OYO has been expanding its presence and now operates over 320 hotels across 35 US states.  

Later in 2023, the company added nearly 100 hotels to its US portfolio and is now targeting to incorporate approximately 250 hotels by the end of this year.

G6 Hospitality's franchise network, which includes Motel 6, generates gross room revenues of $1.7bn, providing a strong fee base and cash flow.

Upon deal completion, OYO intends to utilise its extensive technology suite, global distribution network, as well as marketing capabilities to further enhance the Motel 6 and Studio 6 brands, with the aim of driving financial growth.

Blackstone had previously invested significantly in the Motel 6 brand, transforming it into an asset-light lodging company with a franchise network of around 1,500 hotels across the US and Canada.

G6 Hospitality president and CEO Julie Arrowsmith said: “We are grateful for our successful partnership with Blackstone and the transformation that has positioned us well for this new chapter.

“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 travellers have trusted for over six decades.”

Goldman Sachs & Co served as the lead adviser to Blackstone, with additional financial advice provided by Jones Lang LaSalle Securities and PJT Partners.

Meanwhile, Simpson Thacher & Bartlett LLP acted as Blackstone's legal adviser.