The world's largest foodservice company, Compass Group, has agreed the sale of its Little Chef roadside restaurant chain and Travelodge motel chain.

Compass, which has operations in more than 90 countries, announced back in June that it was selling the two companies in order to focus on its contract catering and vending business.

It has now made an agreement to sell the two companies for £712m (US$1.1bn) to a new company being formed by Permira, a private equity group, reported BBC Online. Compass said it would use funds gained from the sale, which is subject to clearance by the European Commission, to cut debt and buy back shares.

Travelodge is the second-largest budget hotel group in the UK. Little Chef has 368 restaurants beside main roads in the UK, as well as outlets in Compass Group's Moto road service stations. After the sale, Compass will continue to allow the presence of Little Chef at its Moto services.