India’s hotel operator Oyo secured a deal to acquire U.S. discount motel chain Motel 6. The acquisition is worth $525 million all-cash and is expected to close by the end of the year.
With the deal, Oyo will expand its growing footprint in the United States. The company, which was founded in 2012, already operates more than 300 hotels across the nation.
Motel 6, alongside its chain of extended-stay hotels Studio 6, will add around 1,500 hotels in the U.S. and Canada to Oyo’s portfolio.
“This acquisition is a significant milestone for a startup company like us to strengthen our international presence,” OYO’s international division chief Gautam Swaroop said in a statement.
Motel 6 was founded in 1962 and derived its name from its original price of $6 per night. The company has since become popular among travelers looking for cheap accommodation with basic amenities. Private equity firm Blackstone purchased the chain in 2012 for a reported price of $1.9 billion and committed to significant investments to expand its franchise base.
“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,” Blackstone said in a statement.