UK food manufacturer Northern Foods has announced that it has agreed to sell its Cavaghan & Gray Seafood (C&GS) chilled and frozen fish business to Iceland's IFP Holdings, for a cash consideration of £12.6m (US$23.3m).

C&GS makes value-added fish products, particularly coated white fish and Scottish salmon, which are sold principally under the Marks & Spencer and Waitrose retail brands. It also processes fish for other food manufacturers, including Northern.

The net assets to be disposed of are £13m plus £2m of goodwill. Northern said the proceeds will be used to reduce group debt. C&GS has two factories, one at Grimsby that employs around 240 people and the other at Aberdeen employing 150 people.
"Northern is a relatively small player in the UK fish market and we felt that it was in the best long-term interests of the business and its employees to sell it to a company which has real focus and scale in this area," said Northern's chief executive, Pat O'Driscoll.

Northern said the disposal is part of its strategy of focusing on its core strengths and follows the disposals of Fox's Confectionery, the Batchelors and Beck Smith grocery operations, the Emile Tissot foodservice frozen ready meals business and the Minsterley fresh chilled dairy products operation.