Australian baker KH Foods has agreed to sell its Balfours and Betabake businesses to San Remo for a combined AUS$7.4m (US$6.7m).

Under the deal, San Remo also has the option to acquire some other assets of the Betabake business, which, if exercised, will result in KHF receiving up to a further AUS$2.3m (US$2.1m).

The agreement comes as KH Foods focuses on two businesses to revive its fortunes – a unit producing frozen and fresh savoury products at Dudley Park in Adelaide and its Betabake business in Sydney.

In October, KH Foods closed its head office in Melbourne in a bid to further trim costs following August’s sale of its grocery cake operations to George Weston Foods.