Private equity firm Investindustrial has agreed to acquire a significant portion of TreeHouse Foods Inc.’s meal-prep business for $950 million.

The business, which operates 14 manufacturing facilities in the U.S., Canada and Italy plus 19 distribution centers, is expected to generate about $1.6 billion in net sales this year and earnings before interest, taxes, depreciation and amortization of $70 million, according to a statement.

The transaction consists of about $530 million in cash from Investindustrial at closing and about $420 million in senior secured debt to be provided by TreeHouse, according to the statement. Bloomberg News reported in June that Investindustrial was in talks to buy the business.

The divestiture has been a long time coming. TreeHouse, based in Oak Brook, Illinois, said last year that it would launch a review, including exploring the sale of a significant portion of its meal-prep unit in order to focus on the higher-growth snacking and beverage business.

TreeHouse plans to use proceeds of the sale to pay down debt and strengthen its balance sheet.

The maker of private-label grocer items has been looking to boost shareholder value after underperforming the market, even as demand for packaged food jumped during the coronavirus pandemic. The meal-prep business makes products such as pasta, sauces, condiments and pie filling.

TreeHouse reached an agreement in April with Jana Partners that saw the activist investor get a seat on its board.

Investindustrial has previously invested in companies including sports car maker Aston Martin and Ducati motorcycles, according to its website. Its current investments include La Doria, which makes private-label food products.

The deal will boost the firm’s private-label and ingredients businesses, Andrea Bonomi, Investindustrial’s founder, said in an interview with Bloomberg TV.

While the food industry is grappling with inflation and supply chain issues, it will become increasingly important in the future as the world grapples with food security, he said.

“You’ll see major changes in food,” he said. “Food will become a central issue.”

The deal also underscores the role private equity can play when markets are in turmoil, he said.

“Private equity is supposed to invest in moments like this,” he said. “Our usefulness to the world is to provide liquidity when other people are scared or pulling back.”

Investindustrial was advised on the TreeHouse transaction by Lazard Ltd. and Bank of America Corp. TreeHouse’s financial adviser was Evercore Inc.