February 9, 2017

India-based Jain Irrigation Systems Ltd. announced its fourth overseas acquisition, having agreed to acquire Australian agtech company Observant for an undisclosed amount.

Through the deal, Jain Irrigation will acquire the technology and core team of Observant, which provides in-field hardware and cloud-based applications for precision farm water management. Founded in 2003 by Simon Holmes à Court and J. Matthew Pryor, Observant is an early agtech pioneer with more than 5,000 connected in-field devices across its Australian and U.S. operations. Combined with Jain’s irrigation manufacturing and globally-reaching precision ag tech platform, the deal will enable Jain to provide farmers with a wide range of services that can increase crop yields while also conserving resources and cutting production costs for farmers.

“Precision water management is a global opportunity, and by combining our technical leadership with Jain’s global scale and reach, more farmers will have access to the technologies required to meet the food challenges of the 21st century,” said Pryor.

“We are thrilled to have the opportunity to access the best technology in the industry with Observant, a globally recognized Ag Tech leader,” said Aric Olson, president of Jain Irrigation, Inc., in a company statement. “The award winning Observant product line is ready to scale to the tremendous global market that the Jain company services. With Jain’s backing, farmers will have access to the best technology and the backing of a 30-year-old company with 11,000 associates.”

Under the terms of the deal, Pryor will assume the role of the Australian chief executive and chief technology officer, while Holmes à Court will continue being associated with the company in an advisory capacity.

“We are delighted with the opportunities this acquisition brings,” said Holmes à Court, “Observant has taken a ‘no-compromise’ approach to developing and delivering farm-ready technology to help optimize agricultural input costs and increase productivity. We’re immensely proud of what we’ve built over the past 14 years and excited by where Jain will take us.”

Founded in 1963, Jain Irrigation Systems has grown to become a fully integrated, global food and plant production company with turnover exceeding $1 billion, according to the company website. With 30 manufacturing sites across four continents, and sales in 126 countries from 6,700 worldwide dealers and distributors, Jain is the second largest micro-irrigation company in the world, and the largest manufacturer of plastic pipes in India.

The deal for Observant is Jain’s fourth overseas acquisition reports VCCircle, following the acquisition of Thomas Machines SA in Switzerland, NaanDan in Israel, and PureSense Environmental Inc. in the U.S.

Additionally, in November 2015, Jain Irrigation announced it was raising Rs792 cr (US$120.36 million) through an equity sale in the company and Jain Farm Fresh Foods Ltd. – it’s recently spun-off wholly owned subsidiary food business.

London-based investment fund, Mandala Capital, which focuses exclusively on investments in the Indian agribusiness sector, invested Rs396 cr (US$60.2 million) for a stake of between 14.08 percent and 17.13 percent in Jain Farm Fresh Foods, which will carry with it a pre-money enterprise valuation of between Rs 2,500 cr (US$$380 million) and Rs 3,000 cr (US$456 million).

Mandala also agreed to make an investment of Rs 285 cr (US$43.3 million) in Jain Irrigation Systems through compulsory convertible debentures (CCDs), giving the firm a 6.5 percent stake within 18 months when the CCDs convert to equity shares.

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration please contact Ms. Kiernan at lkiernan@globalaginvesting.com