Israeli Drip Irrigation Firm Sold to Mexican Mega-Corp for $1.5 Billion

Israel’s Netafim, which pioneered drip irrigation in the 1960s, was recently purchased by a Mexican mega-corporation for a whopping 1.5 billion.

For the past 50 years, Israel has remained the global leader in drip irrigation, an agricultural technique that delivers the maximum amount of hydration for growing crops using the minimum amount of actual water. Among Israel’s key players in this field is Netafim, which is the world’s largest irrigation-focused operation, boasting sales of $855 million last year.

With a history stretching back to the 1960s, when the company developed and launched drip irrigation technology on a mass scale, Netafim commands 30 percent of the global market, employing more than 4,000 employees with sales in over 110 countries throughout the world.

As part of its push to become a leader in markets that address pervasive international challenges such as water shortages and food production challenges, Mexican plastic pipe producer Mexichem will purchase an 80 percent stake in Netafim, via private equity fund Permira Funds and various other minority shareholders. Under the deal’s terms, a total value of $1.895 billion has been placed on the company.

An Israeli Invention Blossoms in the Desert

Today, the global drip irrigation market is valued at $3.78 billion and is projected to reach $6.54 Billion by 2022, at a compound annual growth rate (CAGR) of 11.6 percent from 2017 to 2022, according to a recent report published by MarketsandMarkets. As one might expect, Netafim is not the only Israeli company among global leaders in drip irrigation, with companies such as Rivulis Irrigation and Elgo Irrigation ranking among top players in the market.

Figures such as these are nothing short of remarkable when one considers that drip irrigation was pioneered by Israeli farmers a half century ago, desperate to raise crops in a fledgling nation plagued by war and inadequate food supplies. As the first major irrigation breakthrough in millennia, Israeli drip irrigation allowed farmers to bring huge amounts of water to their crops without flooding them, wasting precious resources or diminishing yields.

Netafim, which is owned by the collective community Kibbutz Hatzerim in Israel’s Negev Desert, currently grosses hundreds of millions of dollars annually. The sale to Mexichem continues a larger trend of Israeli companies in a variety of fields commanding top dollar on the international stage.

By: United With Israel Staff