After fourteen years of overseas possession, drip irrigation firm Netafim could possibly be in Israeli possession as soon as again. Private fairness agency Fortissimo, headed by Yuval Cohen, is seen as a number one candidate to purchase the Kibbutz Hatzerim-based firm that’s recognized with one in every of Israel’s most well-known innovations. Fortissimo values Netafim at about $1 billion, however it isn’t sure that the corporate’s present proprietor, Orbia of Mexico, which holds an 80% stake, will conform to such a low worth. Orbia (previously Mexichem) acquired Netafim for nearly $1.9 billion in 2018.
The evaluation available on the market is {that a} deal can be closed inside just a few weeks, and that if Fortissimo is the customer, it is going to shake up the irrigation firm in an try and unlock worth. To choose from earlier strikes by the agency in recent times, it might be that Netafim’s present CEO, Gabriel (Gaby) Miodownik, who has South African roots and good connections with the administration of the Mexican firm, will be a part of the listing of managers who’ve been moved on after an acquisition by Fortissimo.
Orbia CEO Sameer Bharadwaj has for months been sounding out the probabilities for a sale of Netafim. The Mexican firm is dealing with rising debt, and the worldwide stagnation within the precision irrigation business is hurting Netafim’s outcomes. Senior sources within the business have been attempting to sketch Fortissimo’s attainable strikes.
Fortissimo is predicted to suggest to further funding our bodies to affix it within the funding, on a mannequin much like the one it has employed up to now. Last May, Fortissimo took over telecommunications firm Cellcom, along with main monetary entities reminiscent of Migdal, Discount Bank, Bank Leumi, Mizrahi Tefahot Bank, and others. If Fortissimo does handle to shut a deal, it’s anticipated to take action on an analogous mannequin, however it has not but settled on the id of its companions. After taking on Cellcom, Fortissimo led a swift technique of changing the CEO, appointing Eli Adadi to the put up.
As far as is understood, Fortissimo doesn’t plan to boost and float Netafim, or to merge it with one other main firm within the irrigation sector reminiscent of Rivulis, a competitor that was enhanced and offered at a substantial revenue by personal fairness agency FIMI to Singapore-based funding fund Temasek.
Netafim was based in 1965 at Kibbutz Hatzerim. The founder and inventor Simcha Blass, chief engineer at water firm Mekorot, thought up the concept of drip irrigation, a particular mechanism that feeds water in a measured and direct method to the roots of a plant. He managed to curiosity Kibbutz Hatzerim in creating the concept, which turned a roaring enterprise success all over the world, and in reality created the sphere of precision irrigation. Since then, Israel, a rustic with a continual scarcity of water and of agricultural land, has change into an influence within the sector. Companies reminiscent of Plastro-Gvat, which turned a part of Rivulis, alongside different kibbutzim reminiscent of Naan, which arrange NaanDan Irrigation, developed options of their very own.
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In 2006, Israeli investment funds Markstone and Tene Capital invested in Netafim. Five years later control of the company was sold to European investment firm Permira at a valuation of $850 million, and, as mentioned, in 2018 it was sold to Orbia at a valuation of nearly $1.9 billion (including debt). Since that acquisition, however, Netafim’s business has not grown substantially. Last year it had revenue of $1.04 billion, 2% less than in the previous year. Operating profit was cut in half to $6 million, and EBITDA rose by just 6% to $125 million. The trend in previous years was similar.
Meanwhile, Orbia’s debt has swollen. At the end of the first half of 2025, its long-term liabilities totaled $6 billion, up 6% within a year. Its total liabilities amount to $8.6 billion, which is apparently pushing the company’s management to sell Netafim in order to reduce its leverage. Netafim’s own debt is not known.
With new CEO, the music changed
“The desire to sell Netafim has been in the open for a long time in the industry,” a source familiar with the matter says. “When Orbia’s current CEO took up the post, the music changed. For years, the company had not succeeded in creating synergy with its other businesses. Netafim did not manage to develop new markets or to increase its revenue. None of the ideas and promises materialized. Even at the time, when Netafim was bought, the price seemed divorced from reality.”
What can Netafim’s new owners do from a business point of view? “It’s a market that has been somewhat at a standstill in the past few years,” another investor says. “In drip irrigation in recent years it has mainly been American companies that have grown and tried to compete with Netafim’s products. This will force Netafim to invent new things, and the deal will be measured by this criterion. Within five years, Netafim will have to invent new products, new irrigation methods, or smarter use of fertilizers in its systems. Anything that will enable its product to continue to be breakthrough, because the companies competing with it today are copying what it created four to five years ago. Historically, Netafim has always been able to stay ahead of its competitors, but that is becoming more and more challenging.”
“The market won’t disappear, but the competition is fierce”
Today, Netafim is a global company, employing some 4,500 people in 110 countries. It leads its field, but precision irrigation represents just 2% of agricultural irrigation globally. This is because there are vast areas in which there is no shortage of water, or farmers that don’t have the capital required to invest in sophisticated methods.
“There’s no doubt that Netafim’s market is important and stable and isn’t going to disappear,” the investor says. “The question is the price at which Orbia will be prepared to sell its shares, and subsequently how Netafim’s competitors will act. The more your technology develops the higher your level of excellence, but in the end it’s holes in a pipe. There are smart elements, such as maintaining water pressure throughout the field, correct spreading of fertilizer, and so forth, but the competition is fierce, and life won’t be easy for the potential buyers.”
Published by Globes, Israel business news – en.globes.co.il – on October 20, 2025.
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