Oyo Rooms Acquires Chennai based Novascotia Boutique.
Budget hotel aggregator Oyo rooms has made its first ever genuine acquisition after announcing on Monday that it has acquired Chennai-based service apartment operator Novascotia Boutique Homes. The acquisition marks Oyo Rooms entry into the niche segment of service apartment and corporate executive stay. In the past, the Gurgaon based company had only resorted to aqua-hires for pursuing its inorganic growth.
The exact value and other financial details of this deal have not been disclosed to the media. However, sources close to the matter claim that Oyo Rooms had to shell out almost $1 million (about Rs 6.71 crore) to acquire the Chennai based company.
“with Novascotia’s strength, we will be adding service apartments to our existing portfolio,” Oyo Room’s chief executive officer Ritesh Agarwal said on acquisition.
Novascotia operates nearly 350 service apartment rooms across several southern Indian cities including Chennai, Coimbatore, Hyderabad, Kochi and Trivandrum. At the time of acquisition it employed nearly 64 people, who will now be absorbed into Oyo Rooms in different capacities. Amongst its client list, it boosts high-profile names like EY and Cognizant Technologies.
The acquisition will also give the Gurgaon-headquartered company a firm footing in the southern market, where it is currently operating more than 1,000 rooms across different budget hotels.
Last year, Oyo Rooms made a failed acquisition bid to acquire Zo Rooms. Following the failure of acquisition, Zo Rooms sued the SoftBank backed company for allegedly stealing its confidential data’s.
Oyo Rooms drive for inorganic growth gained pace ever since it raised fresh capital through back-to-back funding rounds in September last year. First, SoftBank pumped in $250 million ((Rs 1,600 crore) and then later a Chinese hotel company pumped in $10 million (Rs 63 crore) in return of 5% equity stake in the company.