OYO, the travel tech platform preparing for its IPO, estimates that its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) will exceed ₹2,000 crore by FY26, boosted by its recent acquisition of the American budget hotel chain, Motel 6. According to internal documents, Motel 6 is expected to contribute over ₹630 crore to OYO’s EBITDA in FY26, marking the first full year of its integration into the company.
OYO announced its acquisition of the Motel 6 and Studio 6 brands from Blackstone Real Estate for $525 million in an all-cash deal. The acquisition is set to be completed by Q4 2024 and will be financed through a mix of debt and equity, including $250 million from a recent fundraising effort.
The parent company of OYO, Oravel Stays, is expected to refile its IPO papers with the Securities and Exchange Board of India (SEBI) after refinancing its $450 million Term Loan B (TLB) at a lower interest rate.
This acquisition adds 1,500 hotels to OYO’s portfolio, bringing its total hotel count close to 20,000, including Motel 6’s 1,500 franchised hotels across the U.S. and Canada. The average room size of Motel 6 properties and higher room rents are expected to boost OYO’s topline significantly.
In the fiscal year FY25, OYO expects its profit after tax (PAT) to surge over threefold to ₹700 crore. In FY24, the company reported its first-ever PAT of ₹229 crore, followed by ₹132 crore in Q1 FY25. OYO’s Adjusted EBITDA also grew 215% in FY24, reaching ₹877 crore.
The acquisition of Motel 6 marks a key milestone in OYO’s global expansion strategy and is expected to drive significant financial growth for the travel tech giant over the next two years.
Do you have a news tip for Lakshmishree reporters? Please email us at media@lakshmishree.com
Source: Moneycontrol
News Desk
