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MINNEAPOLIS - International Multifoods Corp. today announced that it has agreed to sell the stock of its foodservice distribution business for approximately $180 million in cash in an effort to focus on manufacturing branded foods.
International Multifoods said it expects the sale to an affiliate of Wellspring Capital Management LLC, a private equity investment firm based in New York, to close by the end of September. It plans to use the proceeds to reduce its 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 CEO. "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. Furthermore, the cash generated from this sale will allow us to significantly reduce our debt and improve our financial position."
International Multifoods bought Pillsbury's desserts and specialty products business last year.
Multifoods Distribution Group, headquartered in Denver, is the nation's No. 1 distributor to vending operators and is a leading supplier to independent pizza restaurants and sandwich shops. The distribution business accounts for approximately 70 percent of International Multifoods' sales and 20 percent of its total operating earnings.