SoftBank to buy Fortress for $A4.3b

Feb 16, 2017, 00:47
SoftBank to buy Fortress for $A4.3b

SoftBank, a Japanese technology giant, has agreed to buy Fortress Investment, an USA based private equity firm, for $3.3 billion in cash.

In the Fortress deal, each Class A shareholder will receive $8.08 per share, which represents a premium of 38.6% to the closing price of Fortress Class A common stock on Monday.

Fortress closed up their shares at 6.5 percent with a value of 6.21 dollar per share that estimated their market value to almost 2.4 billion dollars.

It is a friendly acquisition. The current leadership of Fortress consists of three "Fortress principals" - Pete Briger, Wes Edens and Randy Nardone - who are set to retain their roles as the deal goes forward. "There isn't enough information and some people have an impression that this is an investment by the Vision Fund".

To date, SoftBank's plans for this enormous pile of cash have been less vision and more fund.

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The Fortress deal will be separate from that vehicle and is aimed at bringing investment talent in-house, according to a SoftBank spokesman.

SoftBank had hired one of Fortress Investment Group's senior executives, Rajeev Misra, in 2014. The New York - based Fortress Investment Group had so far invested in the fields of real estate, hedge funds and private equity.

Run by Japanese businessman Masayoshi Son, SoftBank is known for its strategy of bold M&A. Chief executive Masayoshi Son recently announced an investment of $50 billion in United States startups to create 50,000 jobs.

"SoftBank is an extraordinary company that has thrived under the visionary leadership of Masayoshi Son", said Fortress Co-Chairmen Pete Briger and Wes Edens in a statement. "We anticipate substantial benefits for our investors and business as a whole, and we have never been more optimistic about our prospects going forward". Nizar Al-Bassam and Dalinc Ariburnu of FAB Partners arranged the Fortress transaction and are to continue to advise Softbank with respect to the firm.

The acquisition, subject to approval by Fortress shareholders as well as regulators, is expected to close in the second half.