Oyo planning to acquire Indian Arm of Key Hotels and Serviced Apartments
Key Hotels operates serviced apartments and hotels across 20 cities and hill stations of India.
Oyo has 4.58 lakh rooms globally by end of 2018 and it’s valued run rate released at $1.8 billion.
Key Hotels looking for a valuation of approximately$125 dollar million around Rs. 880 crores.
Soft bank backed Indian startup, Oyo Hotels and Homes is planning to take over Indian operations of Los Angeles based venture capital and private equity firm, Berggruen Holdings worth $2 Billion founded in September 2006. The firm runs Berggruen hotels in India under the branding of Key Hotels. The chain operates serviced apartments and hotels across 20 cities and hill stations of India including Chennai, Gurugram, Shirdi, Tirupati, and Mumbai along with hill stations like Mahabaleshwar and Manali. It offers the luxurious experience of accommodation at a nominal price range Rs. 3,000 to 4,000 as Oyo accommodation.
But since a few years, Key Hotels are in a quest for the buyer because they have an estimated debt of Rs.160 Crore and looking for a valuation of approximately $125 dollar million around Rs. 880 crores.
According to sources, EY is an intermediary advisor for the deal. Out of complete Portfolio of hotels, key owns seven cities i.e. 1000 rooms while another 13 are franchised and managed.
Oyo has a lot of cash and is looking at co-living and co-working spaces. Keys have hotels in a location such as White field in Bengaluru which can fit in within Oyo requirement of co-living.
In the same queue, Ola acquired Chennai based service apartment company Novascotia Boutique Homes and rechristened as Silver Key in the previous year March 2018. It currently runs over 45 Silver Key properties in nine cities and has enhanced the room count by three times in less than ten months. Oyo is also at the last stage of acquiring a co-working space Innov8 for Rs.200 Crore all-cash deal.
Deal of acquiring Berggruen hotels will assist Oyo in expanding its business across the US by using contacts of Berggruen. This deal will also help Oyo in making tie-ups in LA with a well funded US-based VC.
Oyo has 4.58 lakh rooms globally by end of 2018 and it’s valued run rate released at $1.8 billion. The Hotel giant aims to earn revenue of over Rs. 1,400 Crore in Financial Year 2019. Stay connected with us for latest updates!
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