SoftBank confirms $3.3B acquisition of Fortress Investment Group

SoftBank confirms $3.3B acquisition of Fortress Investment Group

Shares of Fortress Investment Group LLC (NYSE:FIG) are trading higher by about 29% as of 10:30 a.m. EST after the company announced it would be acquired by SoftBank (NASDAQOTH:SFTBF), a Japanese conglomerate.

Japan's SoftBank will pay US$8.08 a share for New York-based Fortress, a 39 per cent premium to the company's Feb 13 closing price, according to a statement on Tuesday.

It is a friendly acquisition.

Fortress principals Pete Briger, Wes Edens and Randy Nardone have agreed to continue leading the business, which will remain based in NY and operate independently within SoftBank, according to the statement. The three founders became billionaires when the fund went public in 2007, raising US$634.3 million in the first initial public offering by a private-equity firm. "There isn't enough information and some people have an impression that this is an investment by the Vision Fund".

JPMorgan advised SoftBank on the deal, while Morgan Stanley advised Fortress. It added that Fortress will continue to be headquartered in NY and that SoftBank will be committed to maintaining the investment group's leadership, business model, brand, personnel, processes and culture.

The $3.3 billion acquisition by SoftBank Group Corp., the Japanese telecommunications, internet and solar energy giant, of Fortress Investment Group marks tycoon Masayoshi Son's latest step in building an investment empire.

SoftBank had hired one of Fortress Investment Group's senior executives, Rajeev Misra, in 2014.

"We join a company with tremendous scale and resources, and a culture completely aligned with our focus on performance, service and innovation", they said in a joint statement.

The deal was announced by New York-based Fortress and SoftBank Group today. "We anticipate substantial benefits for our investors and business as a whole".

Under the terms of the agreement, SoftBank can bring in partners for a portion of the investment.

Nizar Al-Bassam and Dalinc Ariburnu, of the investment firm F.A.B.

This deal will help the bank to fund startups with private equity cash instead of debt.

Rachael Levy contributed reporting.