Rivulis Pte Ltd, a micro-irrigation company owned by Singapore state investment firm Temasek, has agreed to acquire the international business of debt-laden Indian company Jain Irrigation Systems Ltd.
The cash and stock transaction will create a company with total revenue of US$750 million, Jain Irrigation and Rivulis said. Temasek will own 78% of the combined firm while Mumbai-listed Jain Irrigation will own 22%. Temasek had acquired a majority stake in Rivulis in December 2020 and assumed full ownership in March 2022.
The merged company will be dual headquartered in Singapore and Israel, and will continue to be named Rivulis. Richard Klapholz, the current Rivulis CEO, will lead the merged company.
“Rivulis, before the merger, represented the combination of four companies, and through this merger, several more companies from Jain Irrigation’s portfolio will be added, cementing our role as a market consolidator and leader across the globe and creating a single company with a much stronger financial foundation,” said Klapholz.
Jain Irrigation Managing Director Anil Jain separately said the company’s international irrigation business has been valued at Rs 4,200 crore ($537 million) in this transaction.
The company will use the cash proceeds to reduce its consolidated debt by about 45%. This includes all the restructured overseas bonds to the tune of $225 million and complete debt of overseas operating companies.
Jain Irrigation had a consolidated net debt of around Rs 6,000 crore at the end of March 2022. More than half of that amount pertains to the India business.
Jain Irrigation said it will have a long-term supply agreement with the merged entity, which would drive revenue and profit. The merged entity will continue to use Jain brands in markets where they have significant presence and value. Jain Irrigation will also have representative directors and observer on the board of the merged company.