Japan's SoftBank Group Corp.is buying New York's Fortress Investment Group for a sum of 3.3 billion dollars.
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.
At its IPO in 2007, Fortress was valued at $7.4 billion and its valuation has been as high as $14 billion, but it has been struggling recently.
It is a friendly acquisition. Fortress will continue to function under the guidance of Wes Edens, Pete Briger, and Randy Nardone and will operate from NY and work within SoftBank but independently. This decision was taken so that the two companies could work together on the Japanese technology-driven investment fund.
Son said the deal, announced by both sides Wednesday, will immediately contribute to his strategy for growth and complement his Softbank Vision Fund plan for investing in leading technologies including artificial intelligence and the "internet of Things", which links devices through the Internet.
JPMorgan advised SoftBank on the deal, while Morgan Stanley advised Fortress.
It may seem unusual for a technology company to purchase an investment firm but being unpredictable has always been a trait of Masayoshi Son, the CEO of SoftBank. The firm has done this by way of publicly traded permanent capital vehicles such as New Senior Investment Group and Fortress Transportation and Infrastructure Investors (FTAI).
Added Fortress co-chairmen Peter Briger and Wes Edens: "SoftBank is an extraordinary company that has thrived under the visionary leadership of Masayoshi Son". "We are very pleased to announce an agreement setting our business on a great path forward as part of SoftBank, while creating significant value for our shareholders".
On the operational side, SoftBank whose previous acquisitions include UK's ARM Holdings and US's Sprint Corp, said that Fortress will operate as an independent business within the Japanese group. "We anticipate substantial benefits for our investors and business as a whole". 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.