Fortress Investment Group’s Strategic Acquisitions and Sales throughout their Growth

In 2006, Fortress Investment Group a New York asset management corporation, managed funds that helped acquire Intrawest, a Canadian skiing resort. The acquisition deal was huge since this resort is the largest operator in North America, operating some luxury travel brands, including Abercrombie & Kent. In 2016, the ski resort was then sold. Still, in 2006, Fortress-managed funds were also used to purchase RailAmerica and were offering $16.35 per share.

Although it was announced in November, the deal was sealed later, in February of 2007. Two years later, RailAmerica was sold via Initial Public Offering (IPO). After a unanimous vote by the Florida East Coast Industries Board of Directors, a fund managed by the New York group would acquire the corporation in a $3.5 billion deal. The transaction was completed in September of the same year after authorization from the Surface Transportation Board.

Even though RailAmerica managed FEC, the two corporations never merged, allowing Fortress Investment Group to retain FEC even after the RailAmerica IPO. In June 2007, the investment group announced its plans to partner with Centerbridge Partners for an acquisition deal. They planned to acquire Penn National Gaming, a firm that operates horse racing and casinos, for an estimated $6.1 billion. Shareholders in the purchased operator would receive about $67 for every share.

Amidst an unprecedented change in the economic climate, Fortress Investment Group withdrew from the deal. Under the set termination agreement, Fortress paid a fee of $1,475 billion to Penn National. This comprised a $225 million breakup fee and an interest-free loan of $1.25 billion from Deutsche Bank, Wachovia, Fortress, and Centerbridge.

Together with this, the agreement also facilitated the entry of Fortress’ co-chairman into Penn National’s board. Wesley dens have since helped the corporation on numerous fronts.

Background Details

After bidding for assets belonging to the Montreal, Maine, and Atlantic Railway, Fortress Investment Group won in 2014. The line went bankrupt in mid-2013 after the Lac-Mégantic derailment. A runaway train packed with crude oil caused destruction and led to 47 fatalities.

For details: