Northern Foods announced on Wednesday that it agreed to sell its speciality bread, chilled pastry, cakes and flour-milling businesses for €237m (£160m) to London-based private equity fund Vision Capital.
The transaction is expected to complete in January 2007 and is subject to approval by the shareholders of Northern Foods.
Together with the disposal of the business and assets of NFT Distribution in August 2006, Northern expects that proceeds from all its disposals will raise £211.2m. After fees and expenses, total net proceeds of the overall disposal programme will have exceeded £200m.
The deal announced today will include the sell-off of Northern’s Fletchers Bakeries Ltd, and the business and assets of its chilled pastry, park cake bakeries and smiths flour mills operations.
Vision will also take on the existing management teams and employees from these businesses.
Northern said in a statement that it had kept to its strategic review, outlined in May 2006, and was on course to complete the sale of businesses worth 40% of its sales, allowing it to focus on its five main business areas: pizza, biscuits, ready meals, sandwiches and salads, and puddings.
Upon completion of the latest deal, Northern Foods expects to pay part of the proceeds into its principal UK pension scheme.
“This disposal, together with the sale of NFT, completes our divestment programme in line with the objectives we set out in our business review on May 31 2006,” chief executive Pat O’Driscoll said in a statement. “The early conclusion of this process, as a single transaction to Vision Capital, is very positive for our staff and customers. We can now focus all our attention on our core categories to build a competitive and resilient Northern Foods.”
NM Rothschild and UBS advised Northern Foods on the latest round of disposals.