Japanese technology firm SoftBank Group has agreed to buy Fortress Investment for $3.3bn (£2.7bn).
SoftBank said the all-cash deal is part of its transformation into a global business with sustainable long-term growth.
Fortress, which has $18.3bn of real estate in its $70bn portfolio, will operate within SoftBank as an independent business headquartered in New York.
Its three principals, Peter Briger, Wes Edens and Randy Nardone, will stay on to lead the company.
Fortress shareholders will receive $8.08 per share, a 38.6% premium on the company’s closing price on 13 February and a 51.2% premium on its three-month average.
The company said the deal with SoftBank would create “significant value” for shareholders.
When Fortress first went public in February 2007, it had a market value of $14bn with $30bn in AUM, but it has since seen its share price fall more than 75%.
Briger and Edens said: “We join a company with tremendous scale and resources, and a culture completely aligned with our focus on performance, service and innovation.”
The deal is subject to approval from Fortress shareholders and is expected to close in the second half of 2017.
Who is SoftBank?
SoftBank is a Japanese technology holding company with more than 700 subsidiaries worldwide, including the UK-based smartphone chip designer ARM, which it bought last year for $31bn. Among the company’s achievements is the invention of Pepper, the world’s first robot able to read human emotions.
Why are they buying Fortress?
In 2015, SoftBank set out the “SoftBank 2.0” plan to transform itself from a Japanese business with global assets to a global business that strives to create sustainable growth for the “very long term”.
It launched a $100bn technology investment fund last year in partnership with the Saudi Arabia’s Public Investment Fund, managed by a subsidiary in the UK.
The deal with Fortress is an extension of that global ambition and a way to diversify. Masayoshi Son, chairman and chief executive of SoftBank, said it was directly in-line with the 2.0 strategy for “bold, disciplined investment”.
What happens to Fortress’s investments?
There are no expected changes. SoftBank said it intends to keep Fortress independent and retain its existing management. The company said it is “committed to maintaining the leadership, business model, brand, personnel, processes and culture that have supported Fortress’s success to date”.
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