Jain Irrigation Systems Ltd. and Temasek-owned Rivulis Pte Ltd., Singapore said Jain International Trading B.V., a wholly owned subsidiary of Jain Irrigation and Rivulis have entered into definitive transaction agreements for the merger of International Irrigation Business (IIB) of Jain Irrigation with Rivulis which will create an entity with $750 million in revenues.
Temasek had previously acquired a majority stake in Rivulis in December 2020 and assumed full ownership in March 2022.
The cash proceeds will be utilised for reduction of consolidated debt of Jain Irrigation by 45% which includes all the restructured overseas bonds to the tune of $225 million and complete debt of overseas operating companies comprising of IIB, Jain Irrigation said in a statement.
Jain International Business will continue to hold stake of 22% in merged entity with Temasek holding the balance 78%.
Through this deal, Jain Irrigation will also get to release its corporate guarantee given by Jain Irrigation, India of ₹2,275 crore to bondholders & IIB lenders.
The merged entity will continue to use and promote prominent JAIN Brands in markets where they have significant presence and value.
Jain will have representative directors and observer on the board of the company and will be able to help its growth through its significant expertise in micro-irrigation, the statement said.
Going forward Jain Irrigation will focus on further improving on the India 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 – as agreed with the lenders in the recent restructuring, it said.
Anil Jain, managing director, Jain Irrigation said, “We are very happy to enter this alliance with Temasek. We anticipate that the merger with Rivulis will create a world leading player ideally placed to serve its global customer base thanks to its geographic footprint, breadth of offerings as well as technological depth and expertise in micro irrigation.”
Richard Klapholz, CEO, Rivulis said, “While benefitting from significant operational economies of scale and a dedicated, diverse employee base, we will ensure that all commitments to our grower community and to our combined business partners are maintained and further strengthened.”
The company will have market coverage with 25 factories and 3,300 employees across six continents and 35 countries. It will have four brands namely Rivulis, Jain, NaanDanJain and Eurodrip.
It will be dual headquartered in Singapore and Israel and will continue to be named Rivulis Pte. Ltd.
For the purposes of corporate branding, the company will be represented as “Rivulis (In alliance with Jain International)”
Richard Klapholz, the current Rivulis CEO, will continue to lead the company. Top senior associates from the IIB are expected to continue in leadership roles across the company. The transaction is expected to be completed by early 2023.
