Benchmark (LSE:BMK), the aquaculture health, advanced nutrition, and genetics business , is pleased to announce an agreement to fund a Chilean breeding and genetics joint venture with Empresas AquaChile S.A. (“AquaChile”).
Highlights of today's announcement:
· Acquisition of 49% interest in strategically important Chilean salmon breeding and genetics JV for a total cash consideration of $16.25m:
o Accelerates and de-risks Benchmark's strategy in Chile, the world's second largest salmon market, where Benchmark currently has a limited presence
o Partnering with Aquachile, the world's sixth largest salmonid producer, and the largest in Chile
o JV is expected to be immediately and continuously earnings accretive
o Benchmark's management anticipates adjusted EBITDA contribution:
§ in the four months to 30 September 2018 of £1.81m
§ for the first full year to 30 September 2019 of approximately £2.4m
§ of £4.1m at full capacity
· Placing with existing and new investors to raise £19m (before expenses) to fund the total cash consideration of $16.25m (£12.2m), a $5.4m (£4m) loan to the JV and transaction expenses, with the balance being used for general working capital purposes
· Benchmark is on track to meet its expectations for the year ending 30 September 2018 with strong first half performances in a number of key areas
· Half year results for the six months ended 31 March 2018 to be announced on 19 June 2018
Malcolm Pye, Chief Executive Officer of Benchmark, commented:
“We are very pleased to announce our Chilean joint venture, which will help us accelerate and de-risk our growth strategy in Chile, the world's second largest salmon market, where we are underrepresented. Furthermore, the JV is expected to deliver attractive returns and be immediately earnings accretive.
“Combining AquaChile's existing high quality land-based production and locally adapted genetics, with Benchmark's breeding and genetics capabilities and IP, 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.
“We are also delighted to have received strong support from both new and existing institutional investors for the Placing, which was well subscribed.
“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.”