Jain Irrigation buys two US-based irrigation firms for $48.5 million

Agri-Valley Irrigation and Irrigation Design & Construction are micro-irrigation dealers in US

Last Updated : Apr 26 2017 | 1:10 PM IST

The Jalgoan (Maharashtra) based Jain Irrigation Systems Ltd (JISL) has acquired 80 percent stakes in two US-based micro-irrigation dealers - Agri-Valley Irrigation Inc (AVI) and Irrigation Design and Construction Inc (IDC) - for $ 48.5 million.

AVI and IDC have entered into an agreement to merge ownership of their businesses to form a larger distribution company. The new entity - which will be one of the leading players in design, construction, service and innovative agriculture technology – will provide a unique platform to help growers implement irrigation technology. AVI and IDC combined revenue for 12 months ended December 2016 is $ 113 million.

This is a key strategic investment by JISL into one of the largest irrigation markets in the world. JISL already has a presence in US micro irrigation market through its California-headquartered wholly-owned subsidiary Jain Irrigation Inc (JII). California drought has now eroded with significant rains over the last few months. Therefore, now there is strong irrigation business opportunity in the next 18-24 months for the merged distribution company as well as JII.

The merger will help Jain Irrigation to forward integrate itself in the value chain and build direct relationship with growers. This fits into company’s strategy to participate in end-to-end project solutions to harness company’s unique capabilities in integrated irrigation project solutions.

Anil Jain, CEO, Jain Irrigation Systems, said, “We are delighted to be able to invest and participate in such an industry-changing and strategic partnership. The transaction gives us the capability to provide grower focused, turnkey, end-to-end project solutions, consistent with our global solutions and capabilities.”

Agri-Valley Irrigation, founded in 1983, designs, fabricates, installs and maintains irrigation projects using technologies such as drip irrigation systems, micro sprinkler systems, filters, pumps, etc. Started in 2004, IDC opened in 2004 installs technological advanced irrigation equipment.

JISL, with revenue of more than $1 billion, serves the agricultural, piping and infrastructure markets with micro-irrigation systems, PVC and HDPE pipes, plastic sheets, etc. The company is the largest manufacturer of drip irrigation equipment in India and the world's second biggest. Micro irrigation is its largest business unit.