The acquisition of the Fortress Investment Group by SoftBank marked yet another transition for the group from a publicly traded company to a private company. The deal has been in the works for the last two years, but the various legal and financial requirements needed to be ironed out in order to ensure a smooth transition. SoftBank the Tokyo based investment bank has been on a diversification spree and as such required a well-structured company that would help them fulfill this dream. The Fortress Investment Group were ideally placed to take on this role and as they offered a 39 percent premium on the share price opting to buy them out for 3.3 billion dollars.
This deal worked well for both of them SoftBank now had a launch pad for its entry into the American market while the Fortress Investment Group had renewed financial muscle that would enable them to become even more aggressive in their investment. The portfolio held by Fortress is quite impressive by all measures. They own Brightline, a private railroad operator that recently opened the Miami – Palm beach private passenger train. This route is one of those considered too short to fly yet too long to drive. This unique characteristic of such routes is what Brightline is seeking to tap into. The acquisition of Brightline falls under the group’s Transport and Infrastructure portfolio.
There unique investing strategy was also felt when in 2009 after the subprime mortgage crisis, they opted to buy AIG at a time when it was almost collapsing. The deal would cost The Fortress Investment Group 125 Million dollars, but today the company has not only recouped its investment, but what was formerly AIG has metamorphosed into SpringLeaf Financial Limited a company with more than 14 billion dollars assets under management.
As part of the deal, SoftBank had to make some concessions. They agreed that the running of Fortress would be left to the existing board which means that the founding members retain their positions. This will also be subject to the fact that they will also continue injecting profits back into the group while ensuring it continues to enjoy the growth it had previously. Fortress is now no longer listed on the New York Stock Exchange, where it traded as FIG. This means that the board together with its management will have a free hand to make certain investment decisions without the need to go back and convince shareholders of the same.