(JNS.org) The Mexican chemical company Mexichem has agreed to acquire an 80-percent stake in the Israeli drip irrigation pioneer Netafim for about $1.5 billion, the Hebrew-language news website Calcalist reported Monday.
The acquisition boosts Netafim’s value to $1.9 billion. Netafim, the world’s largest producer of drip and micro-irrigation systems, was founded in 1965 in the Negev-based Kibbutz Hatzerim, and pioneered the cutting-edge agricultural technology.
The kibbutz, which held a 32.7-percent stake in the company, will sell 12.7 percent of its holdings to Mexichem in the deal, with Israel’s Permira fund selling 61.4 percent of its holdings and Kibbutz Magal selling 6 percent of its stake.
The global investment group Goldman Sachs was hired to facilitate the sale, according to Netafim. Following the deal, Mexichem vowed to maintain Netafim’s manufacturing presence in Israel for an additional 20 years.
In a quest to conserve water while watering plants, Simcha Blass discovered drip irrigation in Israel in the 1930s. Blass realized that instead of irrigating land with uncontrolled amounts of water, he could create a device that uses friction and water-pressure loss to regulate small leaks.
After Netafim established its first production facility in 1965, it eventually improved Blass’s original design with new technology. The company now has operations in 112 countries, with 13 factories and approximately 2,000 employees outside of Israel.