A year after it bought John Deere Water, the FIMI private equity fund is in talks to sell a stake in the maker of drip-irrigation gear at a threefold valuation.
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FIMI is holding negotiations with an unnamed Indian company and other investors to take up to a 25% stake in Rivulus Irrigation (as the company is now known), for a company valuation of between $170 million and $200 million.
That compares with the $60 million it paid for John Deere Water in June 2014, at a time when the company had $20 million in cash on its books, effectively valuing the business itself at $40 million. Selling the 25% stake at the higher valuation would return FIMI the full value of its investment.
In the past year, FIMI has replaced top management at Rivulus Irrigation, appointing Richard Klapholz as CEO, closing its China factory and moving production and its headquarter to Kibbutz Gvat in northern Israel. Rivulus is expected to post an operating profit this year of about $12 million, on sales of $230 million.
The new equity partners are all strategic investors that would help Rivulus develop new markets.