Fortress buys Florida real estate firm for $3.5bn

Fortress Investment Group has acquired Florida East Coast Industries, which focuses on real estate and railroads, for $3.5bn.

New York-based Fortress Investment Group has acquired Florida East Coast Industries in a $3.5-billion (€2.6 billion) transaction. The Jacksonville-based company has a commercial real estate concern, called Flagler Development Group, and a railroad business called Florida East Coast Railway.

As part of the transaction, Fortress is paying shareholders a total of $84 per share of the New York Stock Exchange-listed company, which includes a special dividend of $21.50 per share. According to the firm, this is a 13.3 percent premium to the share’s closing price of $74.13 on May 7, 2007.
“The value created by this transaction is a direct result of our employees’ dedication, commitment and hard work over many years,” Adolfo Henriques, Florida East Coast’s chairman, president and chief executive officer, said in a statement. “We look forward to working together with Fortress to continue to build our businesses.”
In addition to 351 miles of railroad track between Jacksonville and Miami, Florida East Coast has around 8.6 million square feet of office and industrial space in the cities of Jacksonville and Orlando, as well as the counties of Palm Beach, Broward and Miami-Dade. The company also owns 846 acres of undeveloped land in Florida and has 1.9 million square feet of space under construction.

Earlier this year, Fortress  purchased another railway operator in Florida, RailAmerica, for $1.1 billion.

In related news, Fortress said it has raised $2.8 billion for its latest private equity fund, which has a $5 billion target. The publicly traded alternative investment manager is capping third-party commitments at $4 billion, with an additional $1 billion set to come from Fortress employees and affiliated funds.