Indian startup company Oyo, which is preparing to bring IPO, is expanding its business outside the country. Under this, the company is on the verge of executing a big deal in America. This deal is going to be done completely in cash.
Preparation to buy this American company
According to a report by news agency PTI, Oyo’s parent company Oravel Stage gave information about the proposed deal on Saturday. It said that it has agreed to buy American company G6 Hospitality. G6 Hospitality does business in America under the brand name Motel 6 and Studio 6. Motel 6 and Studio 6 are counted 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 information given by the company, this deal is going to be done completely in cash for $ 525 million. The deal is expected to be completed in the last quarter of this year. Oyo says that after regulatory approvals, the deal can be completed during October to December 2024.
Doing business in America since 2019
Oyo already has a strong presence in America. The company entered the US market in the year 2019. Last year, it added about 100 new hotels in the US market. Currently, its network has more than 320 hotels in 35 states of America. The company plans to add about 250 hotels this year.
Oyo expects profit from the deal
Hospitality startup Oyo believes that buying G6 Hospitality will help it significantly in expanding its scope in America. G6 Hospitality earns huge revenue from the franchise network of Motel 6 brand. This network has earned the company $ 1.7 billion in gross room revenue. This brand has created a strong fee base for G6 Hospitality and provides it with excellent cash flow.
Also Read: Oyo founder Ritesh Agarwal invested Rs 830 crore in the company in the latest funding round