Denmark-based Novo Holdings is planning to acquire Norwegian fish genetics company Benchmark Genetics from Benchmark Holdings in a deal with an enterprise value of up to GBP 260 million (USD 326 million, EUR 311 million).
Novo Holdings announced the agreement on 25 November and said the purchase aligns with its Novo Holdings Planetary Health Investment team’s strategic focus on aquaculture. Novo Holdings had assets of EUR 149 billion (USD 156 billion) as of the end of 2023, is wholly owned by the Novo Nordisk Foundation, and is the controlling shareholder of both Novo Nordisk and Novonesis.
Novo Holdings only recently began investing in aquaculture after it became a new strategic priority for its Planetary Health Investments team. The company kicked off the aquaculture investment strategy with its purchase of Stingray Marine Solutions – the developer behind a robotic laser system that zaps sea lice off salmon – in October.
"We are very pleased to announce plans to acquire the Benchmark Genetics business from Benchmark Holdings. Both animal and plant genetics hold immense potential to transform the global food industry, enabling more efficient and sustainable ways to feed a growing population,” Novo Holdings Planetary Health Investments Partner Aleks Engel said. “In particular, advancements in aquaculture genetics, such as those in the salmon industry, present significant opportunities to improve productivity, resilience, and environmental outcomes."
According to Novo Holdings, the transaction consists of an initial consideration of GBP 230 million (USD 288 million, EUR 275 million), with an additional contingent consideration of up to GBP 30 million (USD 37 million, EUR 35 million) based on certain revenue thresholds. The company said the transaction is expected during the first quarter of 2025 and is subject to shareholder approvals and regulatory clearances.
"The investment in Benchmark Genetics provides us with increased exposure to the salmon industry, which benefits from highly attractive underlying dynamics,” Novo Holdings Senior Partner Johan Hueffer said. “Further, it represents an opportunity to support a leading animal genetics platform with global ambitions. Partnering with an experienced management team, we are confident in the company's ability to drive meaningful advancements in this field.”
According to Benchmark Holdings, the GBP 30 million consideration will be based on the trading performance of the core salmon sub-segment of the genetics business for the period from 1 October 2024 to 30 September 2027. The total GBP 260 million cost represents a multiple of 17.9 times of adjusted EBITDA, Benchmark Holdings said, and the transaction will realize gross proceeds of approximately GBP 200 million (USD 251 million, EUR 239 million), payable in cash at completion.
The sale of Benchmark Genetics comes after Benchmark Holdings announced it was undertaking a strategic corporate review to determine its options to boost its value in January 2024 – a process kicked off by the perception that the company was being undervalued. That perception led the company’s board to consult Benchmark Holdings’ major shareholders, who decided to undertake a strategic review of the company to determine what options it had available.
The company said at the time it was not in any discussions for any potential offers relating to acquisitions – which means the process leading to Novo Holdings’ offer for Benchmark Genetics occurred entirely within 2024.
Benchmark Holdings said it received interest from multiple companies that were looking to purchase the company and/or each of its individual business areas. After reviewing each of the proposals, Novo Holdings’ offer came out on top.
"I am very pleased to have signed an agreement to sell our Genetics business to Novo Holding,” Benchmark CEO Trond Williksen said. “Benchmark Genetics is a leading aquaculture genetics business with great potential and Novo Holdings is an excellent owner to take the business forward."
Williksen added that the sale will enable the company to return capital to its shareholders and focus its efforts on the Advanced Nutrition and Health segments.
“In addition, it will enable us to reduce complexity and streamline the Group structure to significantly reduce costs,” he said. “Novo Holdings will be an excellent new owner of the genetics business and is in an ideal position to take the business forward.”
Benchmark Holdings saw positive progress in the revenue of its Genetics division in Q2 2024, posting a 7 percent increase to GBP 13.2 million (USD 16.5 million, EUR 15.8 million). However, its H1 2024 revenue dropped 11 percent year over year, falling to GBP 28.4 million (USD 35.6 million, EUR 33.9 million). Overall, Benchmark Holdings posted operating losses of GBP 3.7 million (USD 4.6 million, EUR 4.4 million) in H1 2024 – though Williksen said he was pleased with the company’s performance.
“[The period] demonstrated good momentum in the business, supporting our positive outlook,” he said.
In its H1 2024 results, Benchmark Holdings said Benchmark Genetics launched new salmon genetics and genotyping product portfolios and integrated its shrimp activities with the company’s Advanced Nutrition segment to generate commercial opportunities.
Benchmark Holdings raised GBP 20.7 million (USD 26 million, EUR 24.8 million) in December 2021 through a share issuance and floated the idea of listing on the Oslo Børs – a plan it ultimately followed through on in December 2022.
Just a few months after its listing, the company acquired the remaining 10.52 percent minority interest in its subsidiary Benchmark Genetics Iceland, following through on the acquisition of 89.48 percent of what was then called Stofnfiskur in 2014.
