Bright Finally Finds Tasty M&A in Australia's Manassen


After nearly a year on the M&A trail, Shanghai's Bright Food appears to be on the brink of finally landing its first overseas purchase with a deal to buy Manassen Foods, an Australian maker of  chocolates and bread. (English article) Terms of the deal, still being negotiated, would see Bright, China's second largest food group, buy 75 percent of the Australian company for around $416 million, valuing Manassen at about $550 million. People who follow Chinese companies will recall that Bright's name has popped up at least a half dozen times over the last year in conjunction with various international M&A, with Bright most recently chasing another Australian company, Treasury Wine (Sydney: TWE), just last month. (previous post) Bright has said on numerous occasions it is interested in acquiring overseas brands, so from that perspective this deal should come as no surprise. It's hard to say too much about this purchase yet, as no financials are being provided at this stage. But on the surface at least, itl looks pretty good for Bright. Manassen looks like a nice mid-sized company, based on the market valuation, and should easily be affordable for Bright, which earlier this year raised $1 billion in a bond offering and share sale for one of its units. (previous post) Bright's purchase of a 75 percent stake will give it comfortable control of Manassen, which presumably is profitable. There are still a few concerns, most notably the question of whether Bright, in its obvious eagerness for overseas M&A, has overpaid for Manassen. Bright will also have to be careful in terms of managing this company: cross-cultural problems could easily emerge if it tries to exercise too much control; but on the other hand, a too hands-off approach could also pose problems if Manassen managers believe their rich new Chinese ownership gives them a license to take too many risks.

Bottom line: Bright Food's $416 million purchase of Australia's Manassen Foods looks good initially, marking a manageable step for Bright onto the global food stage.

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