Jain-Rivulis merger estimates late 2022 finalization

Rivulis Pte. Ltd., Gvat, Israel, and Jain Irrigation Systems Ltd., Jalgaon, India, have entered a definitive transaction agreement June 21 where Rivulis will acquire multiple overseas subsidiaries of Jain Irrigation’s International Irrigation Business.

Still in the months-long process of receiving regulatory approvals, the merger would create with 25 factories and 3,300 employees across six continents and 35 countries.

Temasek, a Singaporean global investment company that purchased a majority of Rivulis in December 2020 and then the entire company in March 2021, will become the majority shareholder of Rivulis with a 78% stake. Jain Irrigation will receive 22% stock in the merged company due to it taking cash payments to reduce its consolidated debt by 45% and reduce the interest cost.

Adi Mannor-Kiraly, Rivulis’ chief marketing officer, explains that the merger is a part of Temasek’s continued investment in micro irrigation and efforts to address food insecurity and environmental issues on a global scale. Following Rivulis’ sale to Temasek, Rivulis entered a strategic process to find a complementary platform to integrate into theirs to “help achieve the necessary scale with manufacturing distribution of reach and product portfolio.”

“Jain, from the outset of the process, was the right fit,” Mannor-Kiraly says. “It was the right geographical match, it had complementary product, a digital farming portfolio, a shared passion and culture to help growers transition to modern irrigation.”

Jain is no stranger to Temasek, says Aric Olson, CAIS, CID, CSSBB, CPIM and CSCP, president of Jain Irrigation Inc. headquartered in Fresno, California. Temasek had been an investor in Jain Irrigation over a decade ago when it bought stock in the company in the early 2000s.

“They were interested in the irrigation business and space, and they’re a large investor, so they want to partner, acquire, buy stock of the larger entities,” Olson says. “They know our company; we’ve been talking to them on and off for quite a while.”

Once merged, the combined Rivulis-Jain entity will be named Rivulis Pte. Ltd, but for corporate branding purposes, it will be known as Rivulis in Alliance with Jain International.

All Jain Irrigation brands and products will continue with their original names. Once merged, a drip products and projects division will continue utilizing the Eurodrip, Jain, NaanDanJain and Rivulis brands. Jain Irrigation’s Agri-Valley Irrigation Inc. and Irrigation Design and Construction will become part of the new international irrigation services division. Jain’s technology companies ETwater, Jain Agriculture Service and Jain Agriculture Services Australia will join the global high tech division, which would include other brands such as Gavish, Manna, WCADI and Reelview.

The Jain family retained the ability to sell, manufacture and distribute Jain Irrigation products in India. Jain Irrigation Systems will also be a supplier of Rivulis and Jain Irrigation products for its international markets outside of India.

The merged companies will be led by Rivulis CEO Richard Klapholz and dual headquartered in Singapore and Israel. On a North American level, the Rivulis company will be led by John Vikupitz, the former president and CEO of Netafim USA, Fresno, California, who starts as Rivulis’ president of North America July 5. Employee layoffs are currently not in the cards with the merger, says Olson.

For Jain Irrigation, Olson foresees advantages from the merger like purchasing power; new products; significantly reduced borrowing costs; an increased focus on sustainability and environmental, social and governance criteria; use of Rivulis’ finance division to finance grower projects and global rollouts of its irrigation and ag technology.

A large benefit of the merger for Jain Irrigation is the reduction of debt amassed over the last few years by Jain Irrigation’s parent company.

“Now that those debt obligations are cleared and we have a new owner with a different balance sheet, we should be able to resume some significant growth again,” says Olson.

For Rivulis, Mannor-Kiraly predicts the merger will help it be closer to customers, extend its ability to understand customer needs across the world, incorporate those needs into innovative products and solutions and further its sustainability and ESG efforts.

Most notably, Rivulis would receive access to Jain’s expertise in digital farming, especially in the U.S., providing an “ability to offer a robust ag tech solution to really help growers fine tune their irrigation operations in real time,” Mannor-Kiraly says.

“Our intent is to grow and combine the platforms so that the growers in the markets benefit from all the products,” Mannor-Kiraly says. “Our goal is to become a global irrigation and climate leader.”

Mannor-Kiraly says Rivulis expects the merger to close sometime in the second half of 2022. Once the merger is closed, both companies will enter a post-merger integration process and develop strategies on how to combine. In the meantime, both companies are expected to function per usual.

“It’s a large, complex global merger, and so there’s a lot of challenges,” says Olson. “We have a very experienced global team on both sides that have made a lot of acquisitions and a lot of mergers, so I think we’re set up for success.”

Read more about Rivulis.

Read more about Jain Irrigation.

McKenna Corson is the digital content editor for Irrigation Today and can be reached at mckennacorson@irrigation.org.