5th Aug 2016 07:43
LONDON (Alliance News) - Food and farming technology and services company Benchmark Holdings PLC on Friday said it has raised funds to back its investment plans.
The firm said it has raised GBP30.7 million through the placing of 42.3 million shares at 65 pence each. Shares in Benchmark were trading up 9.4% at 63.99 pence on Friday morning.
It will use the proceeds to invest in two joint ventures, an acquisition and a technology investment.
One of the joint ventures is with Norwegian company Salten Stamfisk AS 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, with construction expected to commence in the autumn.
The plant is expected to have a yearly production capacity of 150 million salmon eggs, which is a 38% increase on Benchmark's current capacity. The total capital expenditure budget is GBP32.2 million and the joint venture is finalising bank debt to fund 60% of this, Benchmark said, adding that it intends to invest up to GBP15.5 million in the joint venture in return for a shareholding of up to 89%.
The second joint venture is with an unnamed "major" salmon producer to provide outsourced breeding and genetics services. Benchmark intends to invest up to GBP2.2 million in the joint venture in return for a 50% equity. Activities are expected to commence before the end of 2016.
The acquisition is of specialist breeding and genetics assets and intellectual property in the shrimp sector, Benchmark said, which will give it market entry in a new aquaculture species. The target business has an established genetics programme and broodstock, and a "highly-regarded" genetics team based in Latin America, Benchmark added.
Benchmark said it anticipates significant sales synergies from the acquisition, which is expected to be completed before August 31. Projected investment is GBP3.5 million, plus a deferred share consideration of up to GBP0.5 million.
Finally, Benchmark intends to invest GBP3.5 million in new technology that is expected to enhance its existing pipeline of new animal health products.
The balance of the proceeds is intended to be used for working capital purposes, to fund further capital expenditure projects, to fund bolt-on acquisitions, and for other general corporate purposes including the temporary reduction of debt.
Benchmark said the placing and investments will be initially dilutive of earnings per share, but that it sees "very attractive" returns on its investment plans in the medium and longer term.
"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," Chief Executive Malcolm Pye said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Benchmark Holdings