PGG had agreed to buy water businesses Water Dynamics and Aquaspec from Switzerland's Pentair for an undisclosed sum.
The deal was expected to settle on October 29, and would expand on PGG Wrightson's existing irrigation business, the company said in a statement. Mr Rooney said irrigation had been one of PGG Wrightson's best performing business units recently.
''With the issues in Canterbury, following the high winds, we expect the business will be doing well out of maintenance and replacements. There is a four- to seven-week wait for replacements which are being put on the boat over to here at the moment.''
The purchase made sense, he said. Expansion of the strong current business unit versus entering a new sector looked good compared to some historic transactions.
Although the price was not disclosed, Forsyth Barr estimated the purchase cost at about $5 million.
Full-year 2013 revenue from the existing irrigation business was $45 million, revenue from the combined acquisitions was about $14 million, and expectations were they could be combined, Mr Rooney said.
''We are not expecting as strong a year in 2014 from the existing irrigation business due to the perfect timing of contracts in 2013. However, anecdotally, margins at these businesses are in line with the current irrigation operations,'' he said.
PGG Wrightson chief executive Mark Dewdney said irrigation had been one of the group's highest-performing units and it saw water management as a key challenge and opportunity in agriculture and horticulture in the foreseeable future.
''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.''
Water Dynamics and Aquaspec have 45 staff in Auckland, Hastings, Christchurch and Cromwell.
Forsyth Barr maintained its buy recommendation of PGG Wrightson shares and had a target price of 43c per share, Mr Rooney said.
