Motel 6 sold to Indian hotel operator in $525 million deal

India-based hotel chain Oyo's parent company is to buy budget motel chain Motel 6, according to reports.

The New York-based investment firm Blackstone said in a statement on Friday that the deal with the parent company, G6 Hospitality, would be an all-cash transaction worth $525 million.

In total, the transaction will include the sale of the Studio 6 brand, which specialises in extended stays, in addition to other businesses. The deal is expected to close at the end of the year.

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Launched in India more than a decade ago, Oyo expanded its operations in the United States over the years. It operates 320 hotels in 35 states and will add 250 to the list this year, according to the company.

“This acquisition is a significant milestone for a startup company like us to strengthen our international presence,” Gautam Swaroop, OYO’s international division chief, said in a statement.

Blackstone had bought Motel 6 and Studio 6 for $1.9 billion in 2012. The private equity giant said since then, it has heavily invested in the brand and pursued a strategy that converted the chain into a franchise.

“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, the head of Blackstone Real Estate Asset Management Americas, said in a statement.

Oravel Stays, which owns Oyo, will acquire G6 Hospitality under the deal.