RIO DE JANEIRO (JTA) — A Mexican industrial group will acquire control of Israel’s iconic company Netafim, the world’s largest drip irrigation firm.
Mexichem has agreed to buy an 80 percent stake in Netafim in a deal valuing the company at $1.895 billion. It will pay some $1.5 billion, acquiring a 61 percent stake owned by private equity fund Permira, which bought into Netafim in 2011, before it roughly doubled in value.
Another 6 percent will come from Kibbutz Magal and 13 percent from Kibbutz Hatzerim, which will remain a minority shareholder.
“We were looking for a strategic partner to Netafim that will enable us to continue to develop the company and bring it to the next level,” said Netafim CEO Ran Maidan. “The conditions of the agreement maintain Netafim’s Israeli identity, with commitment to keep the company core activities in Israel for many years.”
Founded in 1965 in Kibbutz Hatzerim, Netafim pioneered the drip irrigation process and has become the leading global supplier of smart irrigation solutions. Netafim’s solutions are helping millions of farmers around the world to significantly increase their yields while saving water and other agricultural inputs. With about $855 million in sales in 2016, it has 17 manufacturing plants and 4,300 employees in over 30 countries.
Mexichem, a global leader in plastic piping and chemicals and petrochemicals, has committed to preserve Netafim’s activity in Israel for 20 years, including its production and R&D facilities.