Jain Irrigation closes the transaction to merge its International Irrigation Business with Rivulis

The company has announced that Jain International Trading B.V. ("JITBV") (a wholly owned subsidiary of Jain Irrigation) and Rivulis have completed the transaction contemplated therein. Merged entity will create a global Irrigation and Climate leader - being 2nd largest in the world with ~ US$ 750 million in revenues. The corporate brand of the combined company will be "Rivulis – In alliance with Jain International" ("MergeCo")

All the regulatory approvals related to the merger of multiple overseas subsidiaries of JITBV have been received by both entities. The condition precedent required by Share Purchase Agreement entered into by Rivulis Pte. Ltd & Jain International Trading B.V, have been satisfied. Jain (Israel) B.V. (step down subsidiary of JITBV) shall hold a strategic minority stake of ~18.7% in Rivulis Pte. Ltd post merger.

By virtue of this cash and stock transaction, the following is achieved.

- Reduction in consolidated net debt of Jain Irrigation by 44% i.e. ~INR 2,800 crore (INR 2.8 billion). December 31, 2022 debt was INR 6,415 crore post transaction debt will be down to INR 3,615 crore.

- Release of corporate guarantee given by Jain Irrigation, India of US$ 300 million (eq. INR 2,460 million) to bondholders and lenders of IIB.

- Jain (Israel) B.V. will continue to hold meaningful stake of ~18.7% in MergeCo

- Jain Irrigation shall have a long-term supply agreement with the MergeCo, which will drive revenues and profits.

- The MergeCo will continue to use and promote prominent JAIN Brands in markets where they have significant presence and value.

- In terms of governance, Jain shall have representative directors and observer on the board of the MergeCo and will be able to help its growth through its significant expertise in micro-irrigation.

- Jain Irrigation retains potential future value generation from the creation of this large global irrigation leader.

Going forward, Jain Irrigation will focus on further improving 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.

Anil Jain, Managing Director of Jain Irrigation, commented: "We are pleased to announce the successful completion of our International Irrigation Business merger with Rivulis, which marks a significant milestone for Jain Irrigation. This strategic alliance with Rivulis and partnership with Temasek has created a global leader in micro irrigation, with a strong geographic footprint and a comprehensive range of offerings. The MergeCo will lead the mass adoption of modern irrigation solutions and digital farming by growers and business partners globally through its focus on accessibility, innovation, and sustainability. We are now better equipped than ever to provide sustainable solutions to the critical challenges facing our planet, including food security and climate change.

We look forward to working together with Temasek and Rivulis to create meaningful positive impact in the agri and food ecosystem, and to explore collaboration opportunities in ESG, hi-tech agricultural inputs, and technology innovation. We remain committed to our mission of promoting water efficiency and productivity for growers, and to benefiting small holder farmers."

Shares of Jain Irrigation Systems Limited was last trading in BSE at Rs. 32.82 as compared to the previous close of Rs. 29.51. The total number of shares traded during the day was 1141281 in over 3511 trades.

The stock hit an intraday high of Rs. 33.49 and intraday low of 29.56. The net turnover during the day was Rs. 36042846.00.

Source : Equity Bulls

Keywords

JainIrrigationSystems INE175A01038 JainInternationalTrading Rivulis Merger