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Going Private: Fortress Investment Group Sold to Japanese Tech Giant

One eventful phone call between old co-workers has led to the multi-billion dollar sale of Fortress Investment Group. The company was completed by SoftBank Group, a massive technology company. SoftBank makes this bold move to place itself amongst the biggest investment companies in the world.

The two people on that eventful call were Pete Briger, co-Chairman of Fortress Investment Group, and Rajeev Misra, who has worked at Fortress until moving to SoftBank in 2014. The markets had been undervaluing Fortress of late, and the leadership decided they needed to go private.

Fortress Investment Group had been founded in 1998 by Wesley Edens, Randal Nardone and Rob Kauffman. Initially focusing on hedge funds, the company diversified and experienced exponential growth. That growth led to the management of over $41 billion of assets and over 1,750 clients.

SoftBank Group is led by Masayoshi Son, a well-known Japanese businessman. He has a reputation for being bold and moving quickly, and that held true in this case. SoftBank purchased Fortress Investment Group for $3.3 billion. True to form, this move was a surprise for those with eyes on the business world.

Recent history shows that SoftBank is not afraid to shake up the business world. A couple years ago they gained control of Sprint Corp., the well-known U.S. mobile company. In the months before the sale of Fortress the company also purchased ARM Holdings PLC, a U.K. company which designs microprocessors, for $32 billion.

Class A stockholders at Fortress received $8.08 a share, a whole 39% above the value of the stock at the time of sale. The price of the stock experienced a surge in the 24 hours following the news of the sale.

SoftBank is making these moves to build a $100 billion investment fund to cement a role in the forefront of upcoming technologies such as artificial intelligence.

Read: https://www.wsj.com/articles/wesley-edens-is-an-investor-with-an-affinity-for-the-underdog-1532111122