INSUBCONTINENT EXCLUSIVE:
According to sources, OYO is planning to deploy a mix of debt and equity to finance the acquisition
It will utilise USD 250 mn from the recently concluded fund raise and existing cash balance2 min read Last Updated : Sep 24 2024 | 2:48 PM
IST
The EBITDA of IPO-bound travel tech platform OYO is expected to cross Rs 2,000 crore in 2025-26 with the American budget hotel chain
Motel 6 adding substantially to its topline, according to documents.
The travel tech unicorn estimates that Motel 6 will add over Rs 630
crore to its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) in the coming financial year, which will be the first
full year of its integration.
The travel tech major is expected to refile its initial public offering (IPO) papers with markets regulator
Securities and Exchange Board of India (SEBI) after refinancing its existing USD 450 million Term Loan B (TLB) at a lower interest
an all-cash transaction.
Oravel Stays, the parent company of OYO stated that it will acquire G6 Hospitality, the leading economy lodging
franchisor and parent company of Motel 6 and the chain's offshoot hotel brand, Studio 6.
The transaction is expected to close in the
fourth quarter of 2024.
According to sources, OYO is planning to deploy a mix of debt and equity to finance the acquisition
It will utilise USD 250 mn from the recently concluded fund raise and existing cash balance.
The travel tech chain's hotel count grew from
12,938 hotels at the end of FY23 to 18,103 at the end of FY24, marking a 40 per cent growth.
"The acquisition will add another 1,500
additional hotels taking the total hotel count to nearly 20,000
But at an average of 110 rooms per hotel in Motel 6 and a higher average room rent, it will significantly augment OYO's topline," a source
said.
Motel 6 operates 1,500 franchised hotels across the US and Canada and extended stay properties called Studio 6.
Before the
acquisition, OYO had projected its PAT to surge over 3-fold to Rs 700 crore in the current fiscal vs FY24
OYO reported its first-ever profit after tax (PAT) of Rs 229 crore in FY24 and followed it up with a profit of Rs 132 crore in Q1 FY 2025
OYO's Adjusted EBITDA grew by 215 per cent to reach Rs 877 crore in FY24.(Only the headline and picture of this report may have been
reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)First Published: Sep 24 2024 |
