So whats the financial rationale behind this deal? If this is a strategic play, which I think it is (Bright Food being a strategic), then what would be BX's exit strategy? Its pretty unusual for a strategic to team up with a PE fund since they have opposite plans (PE wants to exit in 3-5 years whereas the strategic is there for the long-term).
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BX isn't involved.
But its not as unusual as you may think. What you often times see is a foreign strategic that says I want a presence in X market, but I don't want it outright. So you'll have a Chinese widget company that wants a piece of the widget action in Brazil but doesn't want to go at it alone. In that case, they could either find another strategic looking for the reciprocal exposure or they could find a sponsor thats interested in that space as well.
IMO, strategic is harder to find because you need to find another strategic with almost the same exact thought process and view on strategic expansion/growth as you. The sponsor on the other hand, first off there are literally hundreds of them out there that could be interested in that geography/industry. Second, the numbers need to make sense, there's no strategic component of "we're not in the widget making business, we're in the widget repair or widget marketing."
As for exit... they would exit either by selling the remaining portion to their strategic partner, selling their JV interest to an other sponsor, or to an other strategic. Or they could buyout the strategic, and go the usual exit route of IPO or M&A.
how come BX's not involved? The media reports say so. But nevertheless, you're saying the reason they want a partner is simply risk diversification and not some kind of financial backing right (they have the money)?
Risk diversification, or their strategic thesis is not to own a business outright in the X region they just want a presence there. For example, you see alot of non-Chinese companies doing JVs in China... because has become the case that you cannot be a globally competitive company without a presence in China, but you may not want to commit to owning a Chinese asset outright for whatever reasons be it risk tolerance, strategic rationale, etc...
And no, they're not involved.
got it
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