Benchmark raising USD 40 million for new aquaculture projects

Published on
August 9, 2016

U.K.-based biotechnology and food chain sustainability business Benchmark has made new shares available that will provide funds for three new strategic joint ventures (JVs) and capital projects in the aquaculture sector and one investment in animal health.

A placing of 47,279,127 new ordinary shares at a price of GBP 0.65 (USD 0.84, EUR 0.76) per share, aims to raise approximately GBP 30.7 million (USD 39.9 million, EUR 36 million).

"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," said Malcolm Pye, CEO of Benchmark. 

The first JV – with Salten Stamfisk AS – is to build a new combined land and sea based production unit in Norway that will produce a year-round supply of salmon eggs from biosecure facilities. The new plant is expected to have a yearly production capacity of 150 million ova, representing an increase of approximately 37.5 percent on Benchmark's current capacity. 

The total capital expenditure budget for this project is GBP 32.3 million (USD 42 million, EUR 37.8 million) and the JV is finalizing bank debt to fund 60 percent of this. Benchmark intends to invest up to GBP 15.5 million (USD 20.1 million, EUR 18.2 million) in the JV in return for a majority shareholding of up to 89 percent. Requests for tender have been issued to contractors and construction is expected to commence in the autumn.

Next is a JV with a major salmon producer to provide outsourced breeding and genetics services. Benchmark intends to invest up to GBP 2.2 million (USD 2.9 million, EUR 2.6 million) in the project and associated costs in return for 50 percent of the equity. A letter of intent has been signed and contracts are in discussion with the intention to commence activities before 31 December 2016.

The third aquaculture project is the acquisition of specialist breeding and genetics assets and intellectual property in the shrimp sector that will provide a market entry in a new aquaculture species for Benchmark. The target business has an established genetics program and broodstock, together with a highly regarded genetics team based in Latin America. Its specified pathogen resistant (SPR) products are designed to alleviate industry losses due to disease. A sale and purchase agreement is under negotiation and, if final terms are agreed, completion is expected before 31 August 2016.

A fourth project targeted by Benchmark is the GBP 3.5 million (USD 4.5 million, EUR 4.1 million) investment in new technology to enhance its existing pipeline of new animal health products.

Contributing Editor reporting from London, UK

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