SoftBank Group has agreed to acquire Fortress Investment Group for approximately USD 3.3 billion in cash. The private equity company will operate within SoftBank as an independent business headquartered in New York, and SoftBank plans to maintain Fortress' leadership, business model, brand, personnel, processes and culture.
Each Fortress Class A shareholder will receive USD 8.08 per share, which represents a premium of 38.6 percent to the closing price on 13 February and a premium of 51.2 percent to Fortress's 3-month volume-weighted average price, excluding dividends. In addition, each Fortress Class A shareholder may receive up to two regular quarterly dividends prior to the closing. Fortress plans to maintain its current base dividend of USD 0.09 per share for the fourth quarter of 2016 and, if closing does not occur prior to the applicable payment date, for the first quarter of 2017.
Pete Briger, Wes Edens and Randy Nardone will continue to lead Fortress, and have committed to invest 50 percent of their after-tax proceeds from the transaction in Fortress-managed funds and vehicles, and in equity securities of SoftBank and SoftBank-managed funds and vehicles. In addition, the Fortress Principals have agreed to vote shares representing 34.99 percent of the outstanding Fortress voting shares held by them in favor of the transaction. Fortress's senior investment professionals will remain in place and will retain their significant participation interests in fund performance.
SoftBank believed the Fortress acquisition will immediately help it expand its group capabilities, and, alongside its soon-to-be-established SoftBank Vision Fund, will accelerate its SoftBank 2.0 transformation strategy of investment and sustainable long-term growth.
Under the terms of the agreement, SoftBank can bring in partners for a portion of the investment. The transaction is subject to approval by Fortress shareholders, certain regulatory approvals and other customary closing conditions, and is expected to close in the second half of 2017.
