SoftBank Drops $3.3 Billion on Fortress Buy

By Steve Anderson February 15, 2017

SoftBank may be best known in tech circles for its acquisition of Sprint, but recently, it made a step forward in the tech investment world that's a lot more distributed.  In a deal valued at $3.3 billion, reports noted, SoftBank picked up the Fortress Investment Group, which itself had holdings in a variety of tech firms.

Fortress' investments were fairly widely distributed; it boasted holdings in Lyft, Jawbone, and a host of other tech operations, which made the asset manager a substantial operation in tech circles. SoftBank agreed to pay the $3.3 billion in cash outright, and represents the second time that SoftBank has done business with Fortress. Previously, SoftBank had been part of an effort to start an investment operation called the Vision Fund, a $100 billion fund—Apple was said to have kicked in one of those billions—that was under the management of Rajeev Misra, formerly of Fortress just before joining SoftBank.

Though this is a substantial investment, reports suggest that SoftBank has been rapidly dialing back its tech investment after the combined force of Nikesh Arora's departure and SoftBank's purchase of ARM. As for how SoftBank's new arm would work, word from CEO Masayoshi Son noted that the business would be run independently, as its current principals would remain in place. It would, however, also work “alongside” the Vision Fund, so there might be some new reports involved.

Son also commented, “Fortress’s excellent track record speaks for itself, and we look forward to benefiting from its leadership, broad-based expertise and world-class investment platform. For SoftBank, this opportunity will immediately help expand our group capabilities, and, alongside our soon-to-be-established SoftBank Vision Fund platform, will accelerate our SoftBank 2.0 transformation strategy of bold, disciplined investment and world-class execution to drive sustainable long-term growth.”

It would be easy to say, on the surface, that this was a good move, that SoftBank was just expanding along the lines of tech investment and moving into complementary markets where it can draw on its already extensive pool of expertise. Yet it might also be easy to suggest that SoftBank's getting a little too spendthrift, dropping billions the way a kid online uses mom and dad's credit card to run up huge in-app purchases. Considering what all has been going on with Sprint, SoftBank may want to shore up some of its earlier investments before dropping cash on new ones, lest it spread itself too thin.

That could just be a voice of excessive caution talking, though; only time will tell just how well this development works out. If nothing else, SoftBank has clearly positioned itself as a tech leader, and that may work out quite well given the advancing pace of technology markets. 




Edited by Alicia Young

Contributing Writer

SHARE THIS ARTICLE
Related Articles

6 Challenges of 5G, and the 9 Pillars of Assurance Strategy

By: Special Guest    9/17/2018

To make 5G possible, everything will change. The 5G network will involve new antennas and chipsets, new architectures, new KPIs, new vendors, cloud di…

Read More

Putting the Flow into Workflow, Paessler and Briefery Help Businesses Operate Better

By: Cynthia S. Artin    9/14/2018

The digital transformation of business is generating a lot of value, through more automation, more intelligence, and ultimately more efficiency.

Read More

From Mainframe to Open Frameworks, Linux Foundation Fuels Up with Rocket Software

By: Special Guest    9/6/2018

Last week, at the Open Source Summit, hosted by The Linux Foundation, the Open Mainframe Project gave birth to Zowe, introduced a new open source soft…

Read More

Unified Office Takes a Trip to the Dentist Office

By: Cynthia S. Artin    9/6/2018

Not many of us love going to see the dentist, and one company working across unified voice, productivity and even IoT systems is out to make the exper…

Read More

AIOps Outfit Moogsoft Launches Observe

By: Paula Bernier    8/30/2018

Moogsoft Observe advances the capabilities of AIOps to help IT teams better manage their services and applications in the face of a massive proliferat…

Read More