America's most popular motel chain is sold to overseas buyer for $525 million

The deal will see budget motel chain Motel 6 being acquired by the parent company of Oyo, a hotel operator based in India.

The New York-based investment firm Blackstone, which owns Motel 6's parent company G6 Hospitality said the deal would be an all-cash transaction, with the deal expected to close by the end of the year.

The transaction will also include the sale of the Studio 6 motel brand, which caters to customers seeking extended stays.

Oyo, which launched in India just over a decade ago, has been expanding its footprint in the U.S. over the past few years.

The company says it currently operates 320 hotels across 35 states and is aiming to add 250 more this year. The company, headed by CEO Ritesh Agarwal, operates over 157,000 hotels and homes in 35 countries.

'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.

'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.'

Blackstone had purchased Motel 6 and Studio 6 in 2012 for $1.9 billion.

Since then, the private equity giant says 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, head of Blackstone Real Estate Asset Management Americas, said.

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

Motel 6 was founded in Santa Barbara, California, in 1962, by two local building contractors: William Becker and Paul Greene.

The pair came up with a plan to build motels with rooms at low cost rates.

They decided on a $6 room rate per night (equivalent to $60 in 2023), which would cover building costs, land leases, and janitorial supplies; hence the company name Motel 6.

JAMES GORDON