Jain Irrigation Systems on Tuesday announced the acquisition of a shade over 50 per cent stake in Israel's NaanDan Irrigation Systems for $21.5 million (nearly Rs 87 crore) in an all-cash deal. The acquisition will help Jain Irrigation to emerge as the world's largest drip irrigation company in two years.
Managing Director Anil Jain told Business Standard that the company would invest $10.5 million in NaanDan and the rest would go to the promoters Kibbutz Naan, an Israeli cooperative society. NaanDan has revenues of $75 million and 550 employees.
This is Jain Irrigation's fourth acquisition since last year. It bought three US-based firms, Chapin Watermatics Inc, Cascade Specialties Inc and Aquarius Brands Inc. "We will consolidate and integrate over the next few quarters, focus on the Indian market and grow our production capacity organically," he said.
"The deal will provide us access to global technology and add $75 million to our sales. Our exports will increase by $10-15 million in the next two years," he said. The transaction is expected to take place early next month.
"The joint venture will reap economic and strategic benefits of the synergies the two companies enjoy in drip/sprinkler business, to become a worldwide leader in the irrigation business," secretary general Smadar Shavit of Kibbutz Naan said in a statement.
NaanDan would provide technology to Jain Irrigation, which would market the company's products in India.