Jain Irrigation to merge its international irrigation business with Rivulis

Cash proceeds will be used to reduce Jain Irrigation’s consolidated debt by 45%

Cash proceeds will be used to reduce Jain Irrigation’s consolidated debt by 45%

Jain Irrigation Systems Ltd. and Rivulis Pte Ltd., owned by Temasek, Singapore, said Jain International Trading BV, 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 revenue.

Temasek previously acquired a majority stake in Rivulis in December 2020 and took full ownership in March 2022.

The cash proceeds will be used to reduce Jain Irrigation’s consolidated debt by 45%, which includes all restructured foreign bonds up to $225 million and the full debt of foreign operating companies including IIB, Jain Irrigation said in a statement.

Jain International Business will continue to hold a 22% stake in the merged entity, with Temasek holding the remaining 78%.

Through this deal, Jain Irrigation will also be able to release its corporate guarantee given by Jain Irrigation, India of ₹2,275 crore to bondholders and IIB lenders.

The merged entity will continue to use and promote the leading JAIN brands in markets where they have significant presence and value.

Jain will have representative directors and an observer on the company’s board of directors and will be able to contribute to its growth thanks to its significant expertise in micro-irrigation, according to the press release.

Going forward, Jain Irrigation will focus on improving business in India to drive higher growth and margin in one of the fastest growing irrigation markets in the world, and will aim to term to reduce debt on the standalone Indian company’s balance sheet as well – as agreed with lenders during the recent restructuring, he said.

Anil Jain, Managing Director of Jain Irrigation, said, “We are very happy to enter into this alliance with Temasek. We anticipate that the merger with Rivulis will create a leading global player ideally positioned to serve its global customer base through its geographic footprint, breadth of offerings as well as technological depth and expertise in micro-irrigation.

Richard Klapholz, CEO of Rivulis, said: “While benefiting from significant operational economies of scale and a dedicated and diverse employee base, we will ensure that all commitments to our grower community and partners commercial combinations are maintained and strengthened.

The company will cover the market with 25 factories and 3,300 employees spread over six continents and 35 countries. It will have four brands namely Rivulis, Jain, NaanDanJain and Eurodrip.

It will have two headquarters in Singapore and Israel and will continue to be called Rivulis Pte. ltd.

For corporate branding purposes, the company will be represented as “Rivulis (in alliance with Jain International)”

Richard Klapholz, the current CEO of Rivulis, will continue to lead the company. IIB’s top senior associates are expected to continue in leadership positions across the firm. The transaction is expected to be finalized in early 2023.

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