John Deere & Company (NYSE:DE) has signed a contract to acquire Plastro Irrigation Systems Ltd. (TASE: PLSTR) from Kibbutz Gvat at a company value of NIS 265 million. The kibbutz owns 75.1% of the company through Gvat Agriculture and Agricultural Cooperative Business Ltd.
Under the initial agreement from July 2007, John Deere will extend a loan to Plastro. Plastro will use the loan to buy back all its securities held by the public and delist the company from the TASE. John Deere is paying NIS 13.60 per share for Plastro, which closed at NIS 12.92 on Thursday. Gvat will ask a district court to grant an order to convene holders of all of Plastro's securities, both debt and equity, to approve the takeover.
John Deere has undertaken to keep Plastro open and employ Kibbutz Gvat members at the company for 15 years. Each kibbutz member will sign a personal job contract with John Deere. Kibbutz Gvat will cease receiving management fees for Plastro in exchange for an annual payment of $1.3 million over ten years for a non-competition agreement.
Published by Globes [online], Israel business news - www.globes-online.com - on February 10, 2008