Proposed Placing of £186 million and Acquisition of INVE Aquaculture Holding B.V for $342m and Restoration of Trading on AIM

Benchmark Holdings plc (AIM: BMK) is pleased to announce that it has reached agreement to acquire INVE Aquaculture Holding B.V. ("INVE"), a leading specialist manufacturer of primary stage technically advanced nutrition and health products for aquaculture, for a total consideration of $342 million (approximately £227 million). Of the headline consideration, $300 million (approximately £199 million) will be payable in cash and $42 million (approximately £28 million) will be satisfied through the issue of Consideration Shares. Following the acquisition, which is expected to be earnings enhancing in the first full financial year post-completion, INVE management will join the Enlarged Group and invest in Benchmark shares.

The cash consideration is being financed by a placing of new shares to new and existing institutional investors (the "Placing") raising approximately £185.7 million through the placing of 215,922,141 new Benchmark shares at 86p per share. The balance will be satisfied with debt funding to be drawn under New Debt Facilities provided by HSBC Bank plc and Rabobank (Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A.).

HIGHLIGHTS

Acquisition creates global leader in aquaculture technology market

  • Enlarged Group will serve customers in more than 70 countries across six continents;
  • Leadership in speciality aquaculture nutrition market, complementary to Benchmark's position in genetics and health;
  • Benchmark becomes a significant provider of integrated technology, products and services to the industry;
  • Additional 40 products in development with little or no duplication with the Group's existing pipeline.

Transformational transaction

  • Total consideration of $342 million (approximately £227 million), of which $300 million (approximately £199 million) is payable in cash and $42 million (approximately £28 million) will be satisfied through the issue of Consideration Shares. Net cash at completion is expected to be $9-10 million;
  • The purchase price represents 14.1 times INVE's adjusted post tax profits for 2014 and 12.1 times its unaudited adjusted post tax profits for the twelve months ending 31st July 2015*;
  • The acquisition is expected to be immediately earnings enhancing in the first full financial year post-completion;
  • INVE revenues and EBITDA for year ended 31 December 2014 of $89 million and $25.4 million respectively. For the seven months ended 31 July 2015 INVE generated revenues of $60.6m and EBITDA of $15.2m;
  • Placing to raise £185.7 million gross proceeds comprises the issue of 215,922,141 new Benchmark shares at 86p per share, a discount of 7.53 per cent. to price of 93p per share on 8 October the day when the shares were suspended pending the announcement regarding a reverse takeover;
  • Market capitalisation on Admission and following issue of Roll-Over and Consideration Shares of £407.6 million (based on the Placing Price).

Significant opportunities for synergies across the Group

  • Leverage global distribution network across the Group;
  • Apply INVE's expertise in nutrition to Benchmark's health and genetics programmes;
  • Combine global biology and biotechnology R&D activities.

Current Trading

  • The Company's results for the financial year ended 30 September 2015 are expected to be in line with market expectations, since that date, the Company continues to trade in line.

Following the publication of an admission document today, trading in the Company's shares on AIM will resume from 7:30 am on Tuesday 15 December.

*Adjusted post-tax profits are stated before deducting share based compensation, net interest expense and transaction costs relating to the sale of INVE, and after charging notional corporation tax calculated by reference to INVE's effective tax rate for the period.

Malcolm Pye, Chief Executive of Benchmark, commented:

"The acquisition of INVE makes Benchmark a global leader in the aquaculture technology market overnight. Aquaculture is not only a multi-billion dollar sector but one of the fastest growing in the food industry. Importantly we believe the teams at Benchmark and INVE share a common ethos and culture. Both companies have a history of working collaboratively with partners to develop technologies, and both have a drive to address one of the most pressing issues of our time in developing a healthy, sustainable food chain."  

"Since listing, Benchmark has a proven track record of successfully integrating acquisitions – as with SalmoBreed and StofnFiskur last year – and this deal underpins our future growth ambitions. The potential opportunities and synergies presented by INVE offer a step-up both in terms of the technology applied in our products, and the marketing and distribution network already present in some of the fastest growing markets in the world."

Philippe Léger, Chief Executive Officer of INVE, commented:

"Stimulating healthy growth and performance in aquaculture has always been INVE Aquaculture's main driver. Becoming part of the Benchmark group will definitely reinforce this. This new milestone on our growth path unlocks INVE's inherent potential to serve our customers globally with the industry's most comprehensive portfolios of specialized aquaculture products. 

Benchmark's toolbox of health and genetics solutions will complete INVE's current offering in advanced nutritional and health products. Together we will become a unique knowledge and solutions platform that supports our customers in taking better care throughout the culture lifecycle. As a result we can more effectively than ever contribute to our clients' sustainable growth and long-term success."

In view of the size of the Acquisition relative to the Company, the Acquisition is classified as a reverse takeover under the AIM Rules and is therefore conditional, inter alia, upon the approval of Shareholders and the admission of the Enlarged Share Capital to trading on AIM. Such approval is being sought at the General Meeting to be held at 11 am on 29 December 2015. If the Resolutions are approved by Shareholders, it is expected that Admission and dealing in the Placing Shares will commence at 8.00 a.m. on 30 December 2015 and that the Acquisition will complete on 30 December 2015 and that the Consideration Shares and Roll-Over Shares will be admitted to trading on AIM on 31 December 2015.

The Company has secured irrevocable commitments to vote in favour of the resolutions to effect the Acquisition and the Placing to be proposed at the General Meeting in respect of 85.41 per cent of the Existing Ordinary Shares. 

Expected Timetable of Principal Events Date
Publication of the Admission Document  11 December 2015
Latest time and date for receipt of forms of proxy 11 a.m. on 23 December 2015
General Meeting  29 December 2015
Admission and commencement of dealings in the Placing Shares  8.00 a.m. on 30 December 2015
Crediting of the Placing Shares to CREST accounts 8.00 a.m. on 30 December 2015
Issue of the Roll-Over Shares and the Consideration Shares 31 December 2015
Admission and commencement of dealings in the Roll-Over Shares and the Consideration Shares 8.00 a.m. on 31 December 2015
Crediting of the Roll-Over Shares and the Consideration Shares to CREST accounts 8.00 a.m. on 31 December 2015
Despatch of definitive share certificates 14 January 2015

This summary should be read in conjunction with the full text of this announcement and the Admission Document, which is being posted to Shareholders today and will also be made available to view on the Company's website at www.benchmarkplc.com. Unless otherwise defined, defined terms within this announcement have the same meanings as those within the Admission Document.

For further information:  
   
Benchmark Holdings plc
www.benchmarkplc.co.uk
Malcolm Pye, CEO Tel: +44 (0)11 4240 9939
Roland Bonney, COO  
   
Cenkos Securities plc (Nomad, Broker and Joint Bookrunner)
Ivonne Cantu Tel: +44 (0)20 7397 8900
Stephen Keys  
Callum Davidson  
   
Rabobank (Lead Financial Advisor and Joint Bookrunner)
   
Arthur van der Goes Tel: +31 (0) 30 216 0000
Willem Kroner (ECM)  
James Cass Tel: +44 (0) 20 7809 3000
   
Tavistock  
Matt Ridsdale/Niall Walsh Tel: +44 (0)20 7920 3150

 

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