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Benchmark Holdings pays US$16.25mln for 49% stake in Chilean joint venture

The JV establishes a platform for Benchmark to develop a leading position in breeding and genetics in the world's second largest Atlantic salmon production market;
Salmon
The deal accelerates Benchmark's growth strategy in Chile

Benchmark Holdings PLC (LON:BMK) is to fund a Chilean breeding and genetics joint venture with Empresas AquaChile.

The aquaculture health, advanced nutrition, and genetics business is paying US$16.25mln for a 49% stake in the joint venture (JV).

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The company will fund the acquisition with a placing of new shares to raise £19mln, some of which will go towards a US$5.4mln (£4mln) loan to the JV and covering transaction expenses.

Chile is the world’s second-largest salmon market and the deal will increase Benchmark’s currently limited presence in the market.

Sythomer said it expects the acquisition will immediately enhance earnings. In the fourth months to September 2018 – the end of Benchmark’s financial year – the company expects the JV to make a contribution of £1.81mln to adjusted underlying earnings (Ebitda) while in the 12 months following that it is projected an adjusted Ebitda contribution of around £2.4mln.

Benchmark, which is set to declare half-year results on June 19, said it is on track to meet its expectations for the full-year following strong first half performances in a number of key areas.

"Combining AquaChile's existing high-quality land-based production and locally adapted genetics, with Benchmark's breeding and genetics capabilities and IP [intellectual property], we believe, will create a world-class operation. The flexibility to use our facilities in Iceland to support the JV gives us a strong competitive advantage in the market,” said Malcolm Pye, the chief executive officer of Benchmark.

"Following a good first half performance, we are on track to meet our expectations for the current financial year. The continued growing global demand for aquaculture products, combined with the disease challenges faced by the industry, puts us in a strong position to drive attractive growth and returns in the years to come," he added.   

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