Greencore has agreed to sell its malt business to AxéréalUnion De Coopératives Agricoles in a deal worth up to €116.25m.
The deal is conditional on approval by Greencore shareholders.
Greencore Malt mainly comprises three Greencore owned malting businesses based in the UK (trading as Pauls Malt), Ireland (trading as Minch Malt) and Belgium (trading as Belgomalt).
The business has seven malting plants which have a combined annual output capacity of approximately 520,000 tonnes. The business had revenues of €217.2m in 2009 with operating profits before interest and tax of €20.5m.
Greencore said that net proceeds from the deal will be used to reduce its borrowings and the deal is expected to be completed by March.
The company said that some of the group's property assets - about 50 acres including lands at Athy, Co Kildare, which were formerly held within Minch Malt will not form part of the business to be sold.
'Today's transaction completes Greencore's journey into a focused convenience foods player, with clear leadership positions in the UK market and a growing regional presence in North America,' commented CEO Patrick Coveney.
'Having tested the market with several potential purchasers, we believe that the transaction announced today represents an excellent deal for Greencore shareholders, but also one that will provide enhanced opportunities for Greencore Malt's suppliers, customers and employees,' he added.
Meanwhile, in a statement issued before the company's annual general meeting today, Greencore said that despite a challenging consumer environment last year, it had delivered a good performance overall.
In an interim management statement, the company said that it continues to expand in the US and has had a very strong start to the current financial year.
It said its convenience foods division saw a strong start to the year with both sales and operating profit growth year on year. However, the company noted that this comparison is against weak market conditions in the early part of its 2009 financial year.
Greencore said its ingredients and related property division has performed in line with its expectations so far this year. It said that currency effects is having a less pronounced impact on yearly comparisons than in the previous two financial years.
Greencore told shareholders today that it has a well capitalised balance sheet which is sufficient to meet the operational and development needs of the business.
'It is still early in the financial year and although encouraged by our recent trading performance we remain appropriately cautious about the consumer environment for the remainder of the year,' Greencore Chairman Ned Sullivan told today's AGM.
Greencore shares closed up marginally at €1.33 in Dublin.
