MortgagePolitics & Money

Japan’s SoftBank completes $3.3 billion acquisition of Fortress Investment Group

Parent company of New Residential, majority shareholder of Nationstar acquired

SoftBank Group’s move into the U.S. financial markets took a huge step forward on Wednesday, as the Japanese technology company completed its previously announced $3.3 billion acquisition of Fortress Investment Group, the global investment giant.

Fortress is the parent company for New Residential Investment, which buys up mortgage servicing rights by the truckload.

At the end of last year, PHH announced that it planned to sell off its entire mortgage servicing rights portfolio in a massive deal with New Residential.  The company also bought up nearly all of CitiMortgage’s mortgage servicing rights in a deal earlier this year.

New Residential is also buying $117 billion in mortgage servicing rights from Ocwen Financial in a deal that includes New Residential making an equity investment in Ocwen and becoming a 4.9% owner of the nonbank.

Fortress is also the majority shareholder in Nationstar Mortgage, the nonbank now known as Mr. Cooper. Per the latest data from Nasdaq, Fortress owns slightly more than 70% of Nationstar. 

And now, SoftBank owns Fortress thanks to an all-cash $3.3 billion deal.

The move to acquire Fortress is just the latest in a string of U.S. real estate and finance moves for the Japanese company.

Earlier this month, SoftBank Vision Fund, SoftBank’s investment arm, invested $450 million in Compass, a real estate technology company based in New York City. The company called SoftBank’s investment the “largest real estate technology investment” in the history of the U.S.

Two years ago, SoftBank led a $1 billion funding round in SoFi, the San Francisco-based lending startup.

In this deal, SoftBank and its wholly owned subsidiaries now own all of Fortress’ outstanding shares. Fortress’ shareholders approved the deal back in July.

As a result of the deal, each outstanding Fortress Class A share was converted into the right to receive $8.08 per share in cash. Fortress’s common stock has also ceased trading and will be delisted from the New York Stock Exchange.

Prior to the deal being announced, Fortress’ stock traded around $5 per share. Upon the deal’s announcement, the stock rose to nearly $8 per share and stayed in that range, before closing its final day of trading at $7.85.

Now that the deal is completed, Fortress will operate within SoftBank as an independent business headquartered in New York. Fortress Principals Pete Briger, Wes Edens and Randy Nardone will continue to lead the company.

“SoftBank is committed to maintaining the leadership, business model, brand, personnel, processes and culture that have supported Fortress’s success to date,” the company said in a release.

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