Benchmark Holdings PLC said it will form a joint venture with Chilean fish producer Empresas AquaChile SA for a total cash consideration of about $16.3 million.
The Chilean salmon breeding and genetics joint venture, to be branded as a Benchmark business, will enable the company to sell Atlantic salmon eggs to AquaChile and into the Chilean market, and develop salmonid genetics in Chile.
The Sheffield, U.K.-based animal health and genetics company will acquire 49% interest in the joint venture, which is expected to be immediately and continuously earnings accretive.
The company expects its share of earnings from the venture to be £500,000 in 2019, increasing to £4 million in 2025.
Under the agreement, Benchmark will pay $7.5 million upfront, with $8.8 million to be paid in cash in December.
Benchmark will provide a loan of $5.4 million, which will be equally matched by AquaChile, to help the venture partially refinance existing debt and fund its working capital and capital expenditure requirements.
The company is planning to fund the transaction through a £19 million placing involving the sale of 34,545,455 new ordinary shares for 55 pence per share.
Numis is acting as nominated adviser, broker and sole book runner in connection with the placing.
