Benchmark Holdings PLC on Monday said it would use proceeds from the sale of its Genetics business to return capital to shareholders and reduce debt.

The Sheffield, England-based company is selling Benchmark Genetics Ltd and Benchmark Genetics Norway AS to Starfish Bidco AS, a wholly owned subsidiary of Novo Holdings AS, for an enterprise value of up to £260 million.

Benchmark will receive an initial £230 million plus a further contingent payment of £30 million, subject to certain revenue-based targets.

The firm said the disposal price represents a multiple of 17.9 times adjusted earnings before interest, taxes, depreciation and amortisation.

Benchmark said the sale will enable it to focus on its Advanced Nutrition and Health business areas. In addition, the disposal will streamline the current structure to significantly reduce costs, the firm added.

In response, shares in Benchmark jumped 8.1% to 38.20 pence each in London on Monday morning.

Benchmark said proceeds will be used to return capital to shareholders and reduce leverage.

An unsecured floating rate listed green bond and drawn amounts under the revolving credit facility provided by DNB Bank ASA will be repaid in full, it said.

Completion of the sale is expected during the first quarter of 2025 and concludes a strategic review announced in January.

The deal needs to be approved by shareholders at a general meeting, Benchmark said. Shareholders representing just over 71% of the total share capital have already backed the proposal.

Chief Executive Trond Williksen said the deal will unlock ‘significant value and enable us to return capital to shareholders’.

‘The disposal will also allow us to focus all our efforts on developing the significant potential of our continuing business areas, Advanced Nutrition and Health.’

Benchmark said it intends to release full year results for the 12 months ending September on December 12.

Copyright 2024 Alliance News Ltd. All Rights Reserved.