Petrochemicals and plastics piping specialist Mexichem (Tlalnepantla / Mexico; www.mexichem.com) is paying USD 1.5 bn in cash to acquire 80% of Israel’s Netafim (Tel Aviv; www.netafim.com) from private equity group Permira. Kibbutz Hatzerim, the founder, will retain a 20% stake. The company is regarded as a global leader in smart drip and micro-irrigation solutions, which among other things employ PE piping. Permira has owned the majority of Netafim since buying 61% from the kibbutz in 2011. The transaction is expected to close in this year’s fourth quarter.

Since 2011, Netafim has undergone an expansion process focused on its core irrigation business, entering new key markets including China, India and Africa, while “significantly growing revenue and EBITDA,” the investor said. With over 4,300 employees in more than 110 countries, the Israeli firm reported sales revenue of USD 855m in 2016.

Through the deal, Mexichem, which last year posted sales of USD 5.4 bn, will pick up sales channels in Israel and Australia, while Netafim will gain access to Mexichem’s sales channels, especially in Latin America, the Mexican group’s CEO, Antonio Carrillo Rule, told analysts in a conference call. Mexichem already has a small irrigation business, which combined with Netafim will have annual sales of about USD 1 bn, according to US business newspaper Wall Street Journal.