Mexichem to Acquire 80 pc Stake in Netafim for $1.5 Billion

Mexichem has reached a definitive agreement to acquire 80 percent stake in Netafim Ltd, a private irrigation company in Israel, for a total enterprise value of $1.895 billion.

Mexichem will buy the stake in the company from private equity fund Permira, which held a 61.3 percent stake in the Israeli pioneer of drip irrigation systems, and also from Kibbutz Magal and Kibbutz Hazerim, which respectively held six and 33 percent stakes.

Kibbutz Hatzerim, the founder, will retain the remaining 20 percent stake of Netafim’s share capital.

Based in Tel Aviv, Israel, Netafim is a global leader in developing, manufacturing and distributing advanced drip and micro-irrigation solutions, with local presence in more than 30 countries, 17 manufacturing plants, more than 4,300 employees and sales in more than 110 countries worldwide. Netafim’s advanced technologies and end-to-end solutions help growers across the world achieve higher and better crop yields while reducing the use of water and other inputs, such as manpower, nutrients and crop protection.

The transaction is expected to close during the fourth quarter of 2017. Once the transaction is completed, Mexichem will consolidate Netafim under its fluent business group for accounting purposes. Netafim will continue to operate under its current management and with its existing brand portfolio.

“This acquisition will give Mexichem access to smart technology which can be applied to heating and cooling, water management, Datacom, and other sectors, providing a platform from which to create smart industrial solutions around our existing product lines that serve the infrastructure, housing and Datacom markets,” said Antonio Carrillo Rule, Mexichem’s CEO.

“By combining our current irrigation portfolio with Netafim’s business, we will create a formidable growth platform to drive synergies. We expect to leverage Netafim’s resources and expertise to create innovative new solutions across Mexichem’s speciality products,” added Carrillo.

“We are proud to have won the trust of a leading company such as Mexichem, and believe that together we will have an improved cost position and broader portfolio to support continued profitable growth and to extend our reach to new customers and geographies. We also will be able to apply our R&D and technical expertise in developing end-to-end innovative solutions that Mexichem can offer to its industrial customer base,” said Ran Maidan, Netafim’s chief executive officer.