Israeli Irrigation Giant Netafim Nears Sale to Spanish Firm for $800 Million
Translated & summarized from Ice by baba
Israeli drip irrigation company Netafim is nearing a deal for Orbia to sell 80% of its stake to Spain's MAT Holding for approximately $800 million. Kibbutz Hatzerim will increase its ownership to 30% by investing $80 million. The deal, which involves French fund Tikehau Capital, comes after Orbia's 2017 acquisition at a higher valuation and a previous failed sale to Chinese investors due to U.S. regulatory concerns. The acquisition is expected to enhance Netafim's global reach.
The story in 6 lines · by baba
- Netafim is set to be sold to Spain's MAT Holding for an equity value of $800 million.
- Kibbutz Hatzerim will increase its stake to 30% by investing $80 million in the deal.
- Orbia acquired Netafim in 2017 for $1.9 billion, indicating a significant loss on the current sale.
- French fund Tikehau Capital is partnering with MAT Holding to finance the acquisition.
- A previous sale to Chinese investors collapsed due to anticipated U.S. regulatory hurdles.
- Netafim employs 5,000 people globally and has annual revenues of about $1.2 billion.
Israeli drip irrigation giant Netafim is on the verge of a significant ownership change, with Mexican conglomerate Orbia in advanced talks to sell 80% of its stake to Spain's MAT Holding. The deal values Netafim's operations at $1.2 billion, with the equity value set at approximately $800 million after accounting for about $400 million in debt. Kibbutz Hatzerim is set to significantly increase its holding to 30% by investing $80 million for an additional 10% stake, at a lower valuation than its previous sale to Orbia in 2017. MAT Holding, a Barcelona-based group with 2023 sales of 429 million euros, is partnering with French investment fund Tikehau Capital to finance its portion of the acquisition, estimated at $560 million. In the new ownership structure, MAT Holding and Tikehau Capital will each hold around 35% of Netafim, with Kibbutz Hatzerim holding the remainder.
For Orbia, this represents a considerable loss, as they acquired Netafim in 2017 for $1.9 billion. Declining profitability, reduced R&D budgets, and intense competition from Indian and Chinese companies have led to a decrease in the company's valuation. This Spanish-led deal follows the collapse of a previous sale initiative to Chinese billionaire HaoYiu Wang and HOPU investment fund, which was reportedly valued higher at $1.4 billion. A major obstacle to that deal was anticipated U.S. regulatory scrutiny, as Netafim generates about $250 million annually in the U.S., and Washington was expected to impede the transfer of such significant agricultural infrastructure to Chinese ownership.
MAT Holding, a family-owned industrial group employing over 1,200 people in more than 140 countries, specializes in water technologies and crop protection. The Spanish company has a history of acquisitions in Israel, including Magaf Drorot and ARI. Netafim, led by CEO Gabi Myodovnik, currently employs approximately 5,000 people across 19 factories worldwide, with annual revenues of around $1.2 billion. The integration with MAT is expected to expand Netafim's distribution network and create synergies in Europe, Asia, and Latin America.
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