The aquaculture division of biotech company, Sygen International plc., SyAqua, has reached binding agreement to acquire all of the shares and assets of Brazil's leading shrimp breeding stock business, Aquatec, for up to US$13.0 million in cash.

Aquatec has one hatchery and a nucleus breeding programme in Natal, Brazil, with gross turnover of over US$3.0 million and US$6.0 million, and profit before tax of US$2.0 million and US$4.0 million, for the years ended December 2001 and 2002 respectively. Aquatec had net assets of US$1.7 million at December 2002. The acquisition furthers the growth and development of SyAqua, delivering control of the leading shrimp breeding stock business, and its related intellectual properties, in a key territory. Aquatec has a market share estimated at 25% in Brazil, a country which accounts for over 5% of the world's shrimp production. Approximately 70% of Brazil's total shrimp production is exported to the United States and the European Union.

In October of 2002, Sygen acquired the leading shrimp breeding stock business in Mexico, whose market share is approximately 25% of the Mexican market. Sygen announced last week that, as a result of this acquisition, SyAqua achieved a profit of GBP0.7 million in its first year of operations. Mexico accounts for over 2% of the world's shrimp production market.

With this expansion into Brazil, SyAqua will be operating six hatcheries globally - three in Mexico, two in Thailand and one in Brazil. SyAqua utilises these hatcheries to breed shrimp (post-larvae) that are sold to shrimp farmers. As in Mexico and Thailand, the main focus for the Brazil hatchery will be using Sygen's genetic improvement technology to enhance performance including such traits such as growth rate, feed conversion, survival, disease resistance and meat quality.

Phillip David, Sygen's Chief Executive, commented: "This acquisition further highlights our plans to leverage our technology and global leadership into the shrimp market. The combination of SyAqua's quantitative genetics and biotechnology, together with Aquatec's world-class production facilities, distribution and brand name, represents a major step towards SyAqua gaining both technical and market leadership in shrimp breeding."

SyAqua was established in 2002 as Sygen's aquaculture division. In April 2002, Sygen commenced research on applying quantitative genetics and biotechnology to shrimp production. Sygen's subsidiary company, PIC USA, and three other partners, received a grant of US$8.2 million from the U.S. Government ATP programme in November 2001 to fund this research. The global market of farmed shrimp production is estimated at US$7 billion. SyAqua operates Genetic Nucleus Facilities in Hawaii and Mexico and conducts research at its laboratory in California. SyAqua also operates businesses in Mexico and Thailand.