Softbank to buy US-listed Fortress for $3.3b
SoftBank Group has agreed to acquire Fortress Investment Group – which manages $36.7 billion in alternatives – for approximately $3.3 billion in cash. It puts the Japanese company on course to become one of the world’s largest asset managers.
SoftBank said in a filing that it would pay $8.08 per share for all Class A stock in US-listed Fortress, which represents a 38.6% premium to the February 13 closing price. Fortress shareholders will also receive as many as two quarterly dividend payments prior to the transaction closing, expected in the second half of 2017.
Fortress principals Pete Briger, Wes Edens and Randy Nardone will continue to lead the business and commit half of the post-tax proceeds they receive from the sale – they hold a 34.99% stake between them – to Fortress-managed funds and vehicles. Other senior investment professionals will also remain in place.
As of September 2016, Fortress managed $70.1 billion in assets on behalf of more than 1,750 institutional clients and private investors globally. The company operates private equity, credit, real estate and traditional asset management strategies.
Within private equity, Fortress has $13.9 billion in funds and permanent capital vehicles. A further $18.3 billion is in credit and $4.5 billion in liquid markets strategies. Fortress has another $33.4 billion in traditional asset management and $919 million in principal investments, two thirds of which is deployed in private equity.
“For SoftBank, this opportunity will immediately help expand our group capabilities, and, alongside our soon-to-be-established SoftBank Vision Fund platform, will accelerate our SoftBank 2.0 transformation strategy of bold, disciplined investment and world class execution to drive sustainable long-term growth,” said Masayoshi Son (pictured), chairman and CEO of SoftBank.
SoftBank Group’s core companies are SoftBank Corp, which has a range of internet, telecom and payment-related assets, SoftBank Commerce & Service Corp, which distributes IT-related products and services, US mobile operator Sprint, Yahoo Japan, and microprocessor designer ARM Holdings.
The SoftBank Vision Fund, which is targeting $100 billion, is part of a broader drive to keep the company at the forefront of technology innovation globally and allow other investors to participate alongside it.
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