viewBenchmark Holdings PLC

Benchmark casts off £70mln bid for Nordic fish farms


Benchmark Holdings (LON:BMK) plans to raise £70mln in order to gets its hooks into a pair of Nordic based salmon businesses.

The sustainable science firm has cast off a bid for Norwegian salmon genetics firm SalmoBreed and hopes to net a majority stake in Stofnfiskur, an Icelandic salmon breeding company. 

The proposed takeovers would create a “world leading salmon and aquaculture breeding business”, according to chief executive Malcolm Pye, putting Benchmark near the top of the £160mln salmon egg production market.

A £70mln share placement will be used to fund the planned acquisitions, with £10mln going towards the development of the Benchmark’s BioCampus in Edinburgh.

A new division - Benchmark Genetics Limited – will be formed if the deal goes through, bolting onto the firm’s existing Animal Health, Sustainable Science and Technical Publishing units.

The SalmoBreed bid is made up of an initial payment of £19.5mln and £2.9mln over three years upon performance conditions being met.

SalmoBreed focuses on developing genetic material to improve growth, disease resistance and product quality. It made a £200,000 profit before tax in the year to December 2013, and has assets of £1.8mln.

The Stofnfiskur offer will see Benchmark make an upfront payment of £20.7mln, with an additional £8.3mln three years down the line. 

Stofnfiskur, which supplies eggs outside the natural salmon breeding season, made £400,000 in pre-tax profits in 2013, with net assets of £5mln.

Chief executive Pye said that bringing the capabilities and expertise of SalmoBreed and Stofnfiskur strengthens Benchmark’s position as an international supplier to the industry and creates a substantial platform for future growth.

"Animal breeding and genetics play a primary role in the development of production efficiency and sustainability in the global livestock and aquaculture industries,” he said.

“It is particularly important in the high volume production systems that supply the world's poultry, pork, dairy and fish (aquaculture) markets.”

The move also represents Benchmark’s long-term goal expanding into other aquaculture markets, including catfish, grouper, sea bass and shrimp.

In September the firm entered into an agreement with Swiss company HypoPet manufacture and distribute a vaccine for cats which neutralises the primary cause of human allergic reaction to cats.

Benchmark shares were 4p higher at 92p. 



Quick facts: Benchmark Holdings PLC

Price: 37 GBX

Market: AIM
Market Cap: £247.02 m

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