The Mexicans failed, the Spaniards are buying: Netafim is sold at a discount

Mexican Orbia is selling Netafim to Spanish MAT at an enterprise value of $1.2 billion. Kibbutz Hatzerim is buying back 10% of the shares for $80 million. The deal reflects a drop of about a third in the company's value compared to the 2017 acquisition.

Mexican company Orbia is expected to sell Israeli irrigation company Netafim to Spanish MAT Holding by the end of the year, at an enterprise value of $1.2 billion. Under the deal, 80% of Netafim's shares will be sold, and after deducting debt of about $400 million, the company's equity value will stand at about $800 million. Kibbutz Hatzerim, which sold its shares in 2017 for $240 million, is buying back 10% of the shares for $80 million. MAT, a Spanish family-owned industrial group, is in advanced negotiations to bring in French investment fund Tikehau Capital, which will invest hundreds of millions of euros and receive about 35% of Netafim's shares. The deal reflects a drop of about a third in the company's value compared to the previous acquisition by Orbia in 2017, when it paid $1.9 billion. The article notes that Orbia failed in managing Netafim, partly due to reduced investment in research and development and growing competition from Rivulis, India's Jain, and Spain's Azud.