OYO Hotels and Homes is in talks with US-based Berggruen Holdings, to acquire their
company Keys Hotels in India. Berggruen Holdings, a $2 billion private equity and venture
capital firm, is the owner of Berggruen Hotels in India, which operates business hotels under
the Keys brand.
The Keys Hotels brand, established in 2006, currently has a portfolio of about 20 owned, managed and franchised hotels across the country in cities such as Mumbai, Chennai and Mahabaleshwar. Out of its entire portfolio of hotels, Keys Hotels owns seven hotels totalling 1,000 rooms while another 13 are managed and franchised.
OYO has approached Berggruen Holdings and due diligence has been carried out. A lot of investment has gone in Keys, but the business has been languishing. The valuations have to
make sense. Keys was looking at a valuation of about $ 125 million
Keys Hotels, which has a debt of around 1.6 billion rupees, had been seeking buyers for the
past few years. "OYO has approached Berggruen Holdings and due diligence has been carried out. A lot of investment has gone in Keys, but the business has been languishing. The valuations have to make sense. Keys was looking at a valuation of about $ 125 million," an unnamed source
told The Economic Times.
Ernst & Young is the intermediary transaction advisor for the deal, media reports said. If the
deal materialises, it would be the fourth acquisition in a year for Softbank-backed OYO. The
hospitality major had acquired Chennai-based serviced apartment company Novascotia
Boutique Homes in March last year, following it up with the buyouts of internet-of-things
technology venture AblePlus and online marketplace for wedding venues and vendors,
"Our acquisition strategy is targeted towards acquiring entities that assist us in building
capabilities, we do not have any further announcement to make at the moment" an OYO
spokesperson told the financial newspaper. However, Anshu Sarin, chief executive officer of
Berggruen Hotels, denied being aware of any discussions with OYO.
Lately, Ritesh Agarwal-led OYO has been focusing on expanding its international presence,
with a special focus on China. Globally, OYO is present in over 500 cities across eight
countries - India, China, Malaysia, Nepal, UK, UAE, Indonesia, and the Philippines. As of
December 2018, the company had 458,000 rooms across the world.