A decade ago almost to the day, private equity giant Fortress Investment Group listed its shares on New York Stock Exchange, bringing public stockholders into its partnership and blazing path that was also eventually taken by Blackstone Group, Apollo Global, KKR and Carlyle Group. Now, after a bruising run on public markets, Fortress's principals Peter Briger, Wes Edens and Randy Nardone are returning the company to private hands.And from FT Alphaville:
On Tuesday evening, Fortress said it will be sold to Japanese billionaire Masayoshi Son's SoftBank for $3.3 billion in cash, or $8.08 a share. The takeover will create new growth opportunities for Fortress, which will no be partnered with one of the world's most creative and well-connected technology investors. Recently, Son unveiled an over $100 billion SoftBank Vision Fund drawing investment from companies as large as Apple to make what he believes will industry-changing technology investments.
Tuesday's deal, while struck at a fraction of Fortress' IPO price of $18.50 on Feb. 8, 2007 and its first day of trading around $30 a share, also gives credit to some smart moves by the PE firm in recent years despite challenges with of its largest funds. SoftBank's $8.08 a share offer amounts to a 38.6% premium to Fortress's Monday close and a 51% premium to the firm's three month trading average. A year ago, Fortress shares changed hands as low as $4 apiece.
Since the crisis, Fortress has expanded in areas such as senior housing and infrastructure that are attracting heavy demand from institutional investors. The firm has done this by way of publicly traded permanent capital vehicles such as New Senior Investment Group and Fortress Transportation and Infrastructure Investors (FTAI). These vehicles may have appealed to SoftBank because they present stable expansion opportunities for its over $3 billion investment.
In addition to New Senior and FTAI, Fortress's other publicly traded vehicles include $5 billion market cap New Residential Investment Corp., one of the largest mortgage servicers in the U.S., distressed European loan buyer Eurocastle, local newspaper publisher New Media Investment Group, and golf course operator Drive Shack. In total, these public permanent capital vehicles are worth in excess of $7 billion.
Fortress also manages $7.1 billion in private equity funds, $18.3 billion in alternative credit investments in partnership with Mount Kellett Management, and $33.4 billion in traditional fixed income through its Logan Circle division (these figures are as of Q3). Fortress once was a major macro hedge fund investor through its Fortress Macro Fund, but that business was spun into an affiliated platform called Graticule Asset Management and assets stand at just $4.2 billion....MORE
Wednesday, February 15, 2017
"SoftBank's Big Fortress Takeover Is A Bet On Infrastructure, Senior Housing And Mortgages" (and some curious pre-announcement trading)