Granada is paying £5.5m for the business, which has 115 service contracts and sales of £15m. The group will be absorbed into Granada's Sutcliffe subsidiary, which was acquired in 1993.
The sale is the latest in a string of disposal announcements by Gallaher, which intends to concentrate on its distilling and tobacco businesses, which include Whyte & Mackay whisky and the Benson & Hedges, Silk Cut and Hamlet tobacco brands. Last month Gallaher put its Forbouys newsagent chain and Prestige saucepans businesses on the block. The vending machines divisions Vendepac and Flavorpac are also up for sale.
Speaking at Granada's annual meeting yesterday, Gerry Robinson, chief executive, said The Catering Guild would provide a comfortable fit with Sutcliffe, where profit margins had risen to 8.8 per cent in the first quarter, with sales up 9 per cent.
Mr Robinson said last year's purchase of London Weekend Television would see television become the group's largest profit earner. Growth in leisure and service would soon make it Granada's second most profitable area ahead of rental and computer services.
Mr Robinson said that following the flotation of the satellite broadcaster BSkyB, Granada's 10.8 per cent stake was worth around £450m compared with its book value of £70m.Reuse content