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Published: Thu, February 16, 2017
Business | By Megan Pierce

Softbank adds Fortress Investment to growing tech empire

Softbank adds Fortress Investment to growing tech empire

SoftBank, the hyper-acquisitive Japanese telecommunications giant, is buying the asset manager Fortress Investment Group for $3.3 billion.

"Fortress's excellent track record speaks for itself, and we look forward to benefitting from its leadership, broad-based expertise and world-class investment platform", said SoftBank's Masayoshi Son said in a press release.

Fortress Class A stockholders would get $8.08 a share, the companies announced late yesterday, which was 39 per cent above the closing price Monday, excluding dividends.

Fortress was founded in 1998 by Edens, Nardone and Robert Kauffman, who came from Swiss bank UBS AG and New York-based BlackRock Financial Management Inc. However, the deal is subject to approvals by Fortress shareholders, certain regulatory approvals and other customary closing conditions.

Some Softbank watchers were expressed surprise at the move as Son, one of the best-known and most-colorful Japanese businessmen, was known for bold acquisition moves in the technology and communications arena.

SoftBank's CEO Masayoshi Son said that it would run the business independently, led by existing Fortress principles Pete Briger, Wes Edens and Randy Nardone, but that it would also be working "alongside" the Vision Fund. Mr Briger was hired from Goldman Sachs Group in 2002. The stock has soared to a new high for the year. The three founders became billionaires when the fund went public in 2007, raising US$634.3 million in the first initial public offering (IPO) by a private-equity firm.

SoftBank's acquisition is aimed at bringing investment talent in-house, a company spokeswoman said. In Spetember 2016, it agreed to pay more than $30 billion for ARM Holdings, the UK-based software company. 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.

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.

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