Benchmark Holdings Raises €30M for JVs, Acquisition

August 7, 2016

Benchmark Holdings, a pioneering bioagtech company operating in the aquaculture, agriculture, and animal health sectors, announced it has raised £30.7 million (US$40.1 million) through the placing of 42.3 million shares at 65 pence each. The firm plans to use the funds to finance two joint ventures within the fishery sector and a biotech acquisition.

“The funds raised will allow us to continue to execute our strategy of making value-enhancing selective acquisitions, and allow Benchmark to invest in some important strategic joint ventures to deliver significant synergies and sales growth,” Chief Executive Malcolm Pye said in a statement.

The first joint venture will be a tie-up with Salten Stamfisk AS for the construction of a combined land and sea-based operation in Norway that will produce 150 million biosecure salmon eggs on a year-round basis – 37.5% above Benchmark’s current output.

Benchmark will commit £15.5 million (US$20.3 million) of the total £32.3 (US$42.1 million) cost of the project in exchange for a majority stake in the venture of up to 89%, FISHupdate reports.

The second joint venture is a partnership with an unnamed salmon producer through which Benchmark will provide outsourced breeding and genetics services. Benchmark’s investment in the project will be £2.2 million (US$2.88 million) in exchange for a 50% stake in the business that is scheduled to begin operations before the end of the year, according to Morningstar.

In addition to the joint ventures, Benchmark is planning its expansion into a new aquaculture species with the acquisition of specified pathogen resistant (SPR) breeding and genetics assets and intellectual property in the shrimp sector for £3.5 million (US$4.6 million). The deal is being forged with an unnamed Latin American company that is reported to have “an established genetics programme [sic] and broodstock, and a highly regarded genetics team,” according to a recent press release.

The balance of the funds raised will be used by Benchmark for working capital and to fund further bolt-on acquisitions, the paying down of debt, and general corporate purposes.

This string of activity follows only months after Benchmark reached an agreement in December 2015 to acquire INVE Aquaculture Holding B.V., a leading producer of advanced nutrition and health products for the aquaculture industry, from Coöperatieve Rabobank and Royal Bank of Scotland  in a deal worth $342 million. Of the total price, US$300 million would be payable in cash and $42 million would be handled through the transfer of Consideration Shares. To fund the deal, the company raised £185.7 million (US$242.8 million) through the placement of 212,922,141 shares.

Benchmark is accepting the initial dilution of earnings per share that these raisings will cause in order to position itself to profit from a very promising sector. Aquaculture is currently a $140 billion industry that is projected to reach a value of $200 billion by 2020, according to a study released in 2015 by Grand View Research reports The Street. Moreover, the FAO predicts that demand for seafood will climb by 18% by 2020 and by 70% by 2050 – a demand that will not be able to be met by wild caught fish.

“Aquaculture will be an essential part of the solution to global food security,” said Jim Anderson, Co-author; Fish to 2030: Prospects for Fisheries and Aquaculture, Advisor on Fisheries, Aquaculture and Oceans, World Bank Group.

Lynda Kiernan

 

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