SoftBank Group Corp. announced a definitive merger agreement to purchase real estate investment powerhouse Fortress Investment Group for $3.3 billion in cash.
As a result, each Fortress Class A shareholder will receive $8.08 per share, which represents a 38.6% premium above Fortress’ closing share price Monday, and a premium of 51.2% to Fortress’s 3-month volume-weighted average price, excluding dividends.
The agreement is already unanimously approved by a special committee of Independent Directors of Fortress’s Board of Directors and Fortress’s full Board of Directors. However, the transaction is subject to approval by Fortress shareholders, certain regulatory approvals and other customary closing conditions. It is expected to close in the second half of 2017.
Neither of the companies are new names to industry with both heavy investors in top housing companies. Back in September 2015, SoFi announced $1 billion in Series E funding led by SoftBank, marking the largest single financing round in the fintech space to date.
Fortress’s private equity investment portfolio spans a range of companies and industries, which includes Nationstar Mortgage.
“SoftBank is an extraordinary company that has thrived under the visionary leadership of Masayoshi Son,” said Fortress Co-Chairmen Pete Briger and Wes Edens. “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.
Fortress’s leadership team, the “Fortress Principals”, which includes Pete Briger, Wes Edens and Randy Nardone have agreed to continue to lead Fortress, and have committed to invest 50% of their after-tax proceeds from the transaction in Fortress-managed funds and vehicles.
Additionally, Fortress’s senior investment professionals will remain in place, and Fortress will operate within SoftBank as an independent business headquartered in New York.
SoftBank stated it committed to maintaining the leadership, business model, brand, personnel, processes and culture that have supported Fortress’s success to date.
“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 Masayoshi Son, chairman and CEO of SoftBank. “For SoftBank, this opportunity will immediately help expand our group capabilities, and, alongside our soon-to-be-established SoftBank Vision Fund platform, will accelerate our SoftBank 2.0 transformation strategy of bold, disciplined investment and world class execution to drive sustainable long-term growth.”