Riverstone

In 2020, Luke Minion and the leadership team at Riverstone, a hog producer founded in 2013 in Shandong, China, were evaluating Riverstone’s strategy as it rebounded from outbreaks of African Swine Fever (ASF) in two of its three farm complexes. Riverstone was a joint venture between Minnesota-based private equity firm Proterra Investment Partners and agricultural services firm Pipestone Holdings, the third-largest U.S. pork company by sows managed. The vision for Riverstone was to apply Western hog production systems in China, where—despite being the world’s top hog producer and consumer—most production was fragmented and inefficient. Just as Riverstone was ramping up capacity in 2018, China’s hog industry faced a devastating ASF epidemic that wiped out tens of millions of hogs and bankrupted countless small producers. Riverstone had been able to recover by implementing strict biosecurity practices, and as it rebounded, it was benefiting from surging pork prices. From March 2019 to March 2020, Riverstone’s profit per weaned pig rose from $80 to $250. In late 2020, Minion and the Proterra team were considering options for the exit of Proterra’s Food Fund 1, which owned 70% of Riverstone. There was the possibility of an all-out sale, an IPO, or as Minion hoped, selling some portion of the Fund’s equity to the U.S. farmers who were shareholders in Pipestone’s U.S. operations. What was the best option?