Performance Food Group says its agreement to sell its subsidiaries in the fresh cut produce segment for $855m to Chiquita Brands International will enable it to concentrate on its core foodservice business.


Net proceeds after taxes and expenses related to the transaction are expected to be approximately $695m, Performance Food said.


"The sale of Fresh-cut represents an exciting new opportunity for the segment to maximize its future growth potential and achieve its long term strategies by partnering with a respected industry leader," said Bob Sledd,  chairman and CEO of Performance Food.


"This sale will enable Performance Food Group to focus entirely on our core foodservice distribution businesses," he said "We expect to use approximately $290m from the net proceeds of the sale to repay all of the company's indebtedness, including estimated prepayment penalties."


"The balance of these net proceeds will be used primarily for a significant return of capital to shareholders through either share repurchases, cash dividends or some combination of the two," he said. "We expect this will leave the company well positioned to pursue continued growth opportunities in the future."