PGG Wrightson buys water businesses for undisclosed sum
"Smart play. There is money in water."Featured comment
PGG Wrightson [NZX: PGW], the rural services firm controlled by China's Agria Corp, has agreed to buy water businesses Water Dynamics and Aquaspec from Switzerland's Pentair for an undisclosed sum.
The deal is expected to settle on Oct. 28, and will expand on Wrightson's existing irrigation business, the company said in a statement. The price wasn't disclosed, and it isn't clear when the acquisitions will add to earnings.
"Irrigation has been one of our highest performing units in recent years and we see water management as a key challenge and opportunity in agriculture and horticulture in the foreseeable future," chief executive Mark Dewdney said. "These new businesses are very complementary to our existing irrigation business and add a number of additional strengths to extensively grow our reach across the water management sector."
The Christchurch-based company's irrigation business is part of its AgriServices unit, which reported operating earnings before interest, tax, depreciation and amortisation of $10.8 million in the year ended June 30, on sales of $177.8 million.
Water Dynamics and Aquaspec have 45 staff in Auckland, Hastings, Christchurch and Cromwell, giving Wrightson operations in the North Island.
Wrightson's shares were unchanged at 37 cents yesterday, and have dropped 16 percent this year. The stock is rated an average 'buy' based on four analyst recommendations compiled by Reuters with a median price target of 46 cents.