HQ Team
March 30, 2023: India’s Jain Irrigation merged its international irrigation business with Israel-based Rivulis Pte. through a cash and stock transaction to reduce consolidated debt, according to a BSE filing.
Jain (Israel) B.V., a step-down subsidiary of Jain International Trading B.V., will hold a strategic minority stake of about 18.7% in Rivulis Pte. Ltd post-merger.
The merged entity, Rivulis – In alliance with Jain International, will create a global irrigation and climate leader —the second largest in the world with about $750 million in revenue.
The merger reduced the consolidated net debt of Jain Irrigation by 44%, or about INR 28 billion.
On December 31, 2022, the debt was INR 64.15 million. After the transaction, the debt will be down to INR 36.15 million.
$300 million guarantee
A $300 million (INR 24.6 billion) corporate guarantee has been given by Jain Irrigation, India, to bondholders and lenders of international irrigation business.
Jain Irrigation will have a long-term supply agreement with the new entity, which will drive revenues and profits and will continue to use and promote prominent Jain Brands in markets where they have a significant presence and value.
Jain will have representative directors and observers on the board of the merged entity and will be able to help its growth through its significant expertise in micro-irrigation, according to the BSE statement.
“Jain Irrigation retains potential future value generated from the creation of this large global irrigation leader.
“Going forward, Jain Irrigation will focus on further improving Indian business to drive higher growth and margin in one of the fastest-growing irrigation markets in the world and eventually aim to reduce debt on the standalone Indian business balance sheet as well.”
New irrigation solutions
Anil Jain, Managing Director of Jain Irrigation, said the alliance with Rivulis and the partnership with Temasek had created a global leader in micro-irrigation with a strong geographic footprint and a comprehensive range of offerings.
The merged entity “will lead the mass adoption of modern irrigation solutions and digital farming by growers and business partners globally through its focus on accessibility, innovation, and sustainability.”
Jain Irrigation will explore collaboration opportunities in ESG, hi-tech agricultural inputs, and technology innovation. “We remain committed to our mission of promoting water efficiency and productivity for growers, and to benefiting smallholder farmers,” he said.
Temasek, a global investment company headquartered in Singapore, is the parent firm of Rivulis.
The Kibbutz Gvat, Jezreel Valley-based Rivulis is a global manufacturer and provider of complete micro and drip irrigation systems and solutions for seasonal horticulture, orchards, vineyards, row crops, SDI and greenhouse, soilless, hydroponic applications.
It was founded in 1966 as Plastro Irrigation Systems Ltd. Rivulis has 16 manufacturing facilities, 2,300 employees, three R&D centres (in Israel, Greece and California) and multiple Design Centers.
