"SoftBank's Big Fortress Takeover Is A Bet On Infrastructure, Senior Housing And Mortgages" (and some curious pre-announcement trading)
From Forbes:
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.
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
And from FT Alphaville:
Snap AV: Clairvoyant dealings in Fortress