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Orbia Sells Netafim to MAT Holding and Kibbutz Hatzerim for $1.2 Billion
The Mexican conglomerate Orbia is in advanced negotiations to sell the Israeli drip irrigation giant Netafim to Spain's MAT Holding and Kibbutz Hatzerim by the end of the year. The transaction values Netafim's business at $1.2 billion, with an equity value of approximately $800 million after accounting for $400 million in debt. This sale represents a significant financial loss for Orbia, which acquired the company in 2017 for $1.9 billion.
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What happened
- 01Mexican conglomerate Orbia is in advanced talks to sell Israeli drip irrigation giant Netafim by the end of the year.
- 02The transaction values Netafim's business at $1.2 billion, with an equity value of $800 million after accounting for $400 million in debt.
- 03Kibbutz Hatzerim will invest $80 million to increase its ownership stake in Netafim to 30%.
- 04Spain's MAT Holding and French investment fund Tikehau Capital will acquire the remaining 70% of Netafim, holding about 35% each.
- 05The sale represents a significant loss for Orbia, which purchased Netafim in 2017 for $1.9 billion.
- 06Netafim employs 5,000 people globally and generates annual revenues of approximately $1.2 billion.
- 07A previous attempt to sell Netafim to Chinese investors collapsed due to anticipated regulatory hurdles in the United States.
Under the terms of the deal, Kibbutz Hatzerim will invest $80 million to acquire an additional 10% stake, bringing its total ownership in Netafim to 30%. The remaining 70% will be purchased by the Barcelona-based MAT Holding and its financial partner, the French investment fund Tikehau Capital. MAT Holding and Tikehau Capital are expected to hold approximately 35% each in the restructured company.
To finance its $560 million share of the acquisition, MAT Holding is securing backing from Tikehau Capital, which manages tens of billions of euros. The acquisition follows a period of declining profitability, reduced research and development budgets, and intense competition from Indian and Chinese firms for Netafim, which employs 5,000 people globally and has annual revenues of about $1.2 billion. A previous attempt by Orbia to sell Netafim to Chinese buyers collapsed due to anticipated regulatory hurdles in the United States.
Summarized by baba from the reports of 3 newsrooms. Updated
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