MINNEAPOLIS -- International Multifoods Corp. (NYSE:IMC) today announced it has entered into an agreement with a newly formed affiliate of Wellspring Capital Management LLC, a private equity investment firm based in New York City, to sell the stock of its foodservice distribution business for approximately $180 million in cash.
According to a company release, the transaction should be completed before the end of September.
Multifoods intends to use the cash proceeds from the sale to reduce debt.
"The decision to sell the company's foodservice distribution business represents another important step forward in Multifoods' transformation to a branded food products company," said Gary E. Costley, International Multifoods chairman and chief executive officer. "By divesting the foodservice distribution business, we can now focus our full attention on food manufacturing and build on our expertise in grain-based foods."
As a result of the sale, Multifoods now must report its foodservice distribution business as a discontinued operation.