Compass Group has sold its European vending machine business, Selecta, for more than £770m, the catering giant announced this weekend.
The new owner, a company managed by private equity firm Allianz Capital Partners, has paid £772.5m, a multiple of 16 times Selecta's 2006 operating profit before goodwill amortisation.
Tax and transaction costs are anticipated at approximately £20m.
Compass intends to return £500m of the proceeds to shareholders through a share buy-back programme during the next year to 18 months. £45m will go into its UK pension pot with the remainder used to pay off debt.
Compass group chief executive Richard Cousins said: "This is a good outcome for Compass, further helping to focus on our core contract catering and support services business."
The disposal, which is subject to competition clearance, is expected to complete in July. Selecta's senior management team, headed by chief executive Justin Tydeman will transfer with the business as part of the deal.
Selecta operates around 15,000 vending machines in 22 countries. In 2006 it had an operating profit of £47m on turnover of £482m.
By Chris Druce
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