The Hovis to Mr Kipling company Premier Foods has sold its meat-free brands Quorn and Cauldron to a private equity consortium for £205m.
Exponent Private Equity and Intermediate Capital Group bought the meat-free division, which has three manufacturing sites in the UK and employs nearly 595 staff, ending months of speculation over the brands' future.
Premier has been weighing up its options as it looks to alleviate a £1.4bn debt pile, built up following an acquisition spree that included Hovis owner RHM and Campbell's Soup in UK and Ireland.
Quorn was purchased for £172m from Marlow Foods in 2005. The first Quorn product was launched in 1985 using a specially developed protein-based ingredient called mycoprotein, and it has since become a popular meat substitute for vegetarians. Cauldron offers a range of tofu products and vegetarian sausages.
Premier said in the year ending 31 December, the meat-free division made revenues of £129m and a trading profit of £16.2m.
The deal improves Premier's earnings to debt ratio and means it is now likely to hit its target leverage ratio two years ahead of schedule.
Chris Graham, a founding partner of Exponent, which has stakes in thetrainline.com and bed store Dreams, said the firm plans to grow the meat-free business further. Exponent is a private equity firm which focuses on companies with an enterprise value of between £75m and £350m.