Japan’s SoftBank to Acquire Fortress Investment Group for $3.3 Billion
New York: SoftBank Group is buying alternative-asset manager Fortress Investment Group LLC for $3.3 billion in cash to operate alongside the Japanese company’s soon-to-be-established technology investment fund. Japan’s Sof t Bank wil l pay $8.08 a share for New York-based Fortress, a 39% premium to the company’s February 13 closing price, according to a statement on Tuesday. Fortress princi- pals Pete Briger, Wes Edens and Randy Nardone have agreed to continue leading the business, which will remain based in New York and operate independently within SoftBank, according to the statement.
SoftBank’s founder Masayoshi Son is in the process of creating a $100 billion Vision Fund with Saudi Arabia and other backers that would make the Japanese billionaire one of the world’s biggest technology investors. The Fortress deal will be separate from that vehicle and is aimed at bringing investment talent inhouse, according to a SoftBank spokeswoman. The acquisition, subject to approval by Fortress shareholders as well as regulators, is expected to close in the second half.
“Fortress’s excel lent t rack record speaks for itself, and we look forward to benefiting from its leadership, broad-based expertise and world-class invest- ment platform,” Son, SoftBank’s chairman and chief executive officer, said in the statement.
Shares of Fortress closed up 6.5% at $6.21 on Tuesday, giving the New York-based company a market value of about $2.4 billion. SoftBank rose 1.6% in Tokyo on Wednesday.
“SoftBank is not doing a great job in communicating where this fits into their investment strategy,” said Tomoaki Kawasaki, an analyst at Iwai Cosmo Securities Co. “There isn’t enough information and some people have an impression that this is an investment by the Vision Fund.” Fortress was founded in 1998 by Edens, Nardone and Robert Kauffman, who came from Swiss bank UBS AG and New Yorkbased Black Rock Financial ManagementInc.Thethreefounders became billionaires when the fund went public in 2007 raising $634.3 million in the first IPO by a private-equity firm.