Japanese giant Softbank has announced that it is acquiring Fortress Investment Group, in a deal with an expected value of $3.3 Billion. The acquisition looks to have been made from an strategic perspective and would help diversify Softbank’s portfolio.
Announcing the acquisition, Softbank CEO Masayoshi Son said:
Fortress’s excellent track record speaks for itself, and we look forward to benefiting from its leadership, broad-based expertise and world-class investment platform. 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.
In case you are unfamiliar with it, the Fortress Investment Group, LLC is a investment management firm based out of New York City. The firm is pretty huge and handles an impressive portfolio with investments in the likes of Lyft, ZestFinance, Xapo, Jawbone etc. It is publicly traded and at the time of its 2007 IPO, was the first large private equity firm in the US to have gone public.
Meanwhile, Softbank and Fortress aren’t complete strangers to each other and have had a few interactions over all these years. For example, Softbank has committed a gigantic $100 billion to the Vision Fund. The fund is managed by Rajeev Mishra who came from — guess? — Fortress.
After the purchase, Softbank will run Fortress independently and it will continue to be led by existing Fortress principals Pete Briger, Wes Edens and Randy Nardone. However, we can expect Softbank to determine Fortress’s future course.
Interestingly, it seems like Softbank’s strategy is undergoing another major shift. The company seems to be moving away from a multitude of aggressive investments to a few large ones. Look at the $24 Billion ARM acquisition for instance. The change appears to have been somewhat initiated by Nikesh Arora’s untimely and sudden departure from the company.
Welcoming the acquisition, Fortress co-chairmen Pete Briger and Wes Edens said:
SoftBank is an extraordinary company that has thrived under the visionary leadership of Masayoshi Son. 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.
Commenting about the future, they added:
We join a company with tremendous scale and resources, and a culture completely aligned with our focus on performance, service and innovation. We anticipate substantial benefits for our investors and business as a whole, and we have never been more optimistic about our prospects going forward.
