CArr'S Group has sold Silloth Flour Mill as part of a £36m deal to sell its food division – Carr Flour Mills – to Whitworth Holdings.

The sale will be worth £24.9m after adjustments for working capital and net debt.

It says the disposal will allow it to concentrate on its remaining interests in agriculture and engineering.

The Carlisle-based company, which changed its name from Carr's Milling Industries to Carr's Group last year, will use the cash to return £16m to shareholders in the form of a special dividend and use the remaining £8.9m to strengthen its balance sheet.

Carr's chief executive Tim Davies said: “The sale of Carr’s Flour Mills represents an exciting stage in Carr’s strategic development.

“At a time of increasing competition and volatility in the flour market, consolidation is essential and inevitable.

“This acquisition by Whitworths presents a great opportunity for the food division to continue building on the strong foundations laid over many years.

“On behalf of the Carr’s Board, I would like to thank everyone who has contributed to the division’s success.”

He added: “We will continue to focus on our strategy of delivering growth in our UK agriculture business, the development of our international feed supplement businesses and building our specialist engineering division in niche markets across the globe.

“Carr’s continues to benefit from both operational and geographic diversity and a strong balance sheet.

“We look forward to an exciting future focused on delivering growth in our higher margin products and services within the agriculture and engineering divisions.”

Martin George, chairman of Whitworths Holdings, added: “The Whitworths Board is delighted with the announcement of the acquisition of Carr’s Flour Mills.

“Carr’s Flour Mills shares a similar history to Whitworths in that it is a long standing business which has received material investment in recent years.

“The business is a great fit geographically and will give us access to the south east, north of England and Scottish markets that would otherwise not be available and means we have national reach.

“I would like to welcome the employees who join us from Carr’s Flour Mills.” Carr’s has 50 UK sites, a robotics business in Germany and animal-feed plants in the US.

Its other Cumbrian operations include the Carrs Billington machinery dealerships and country retail stores, and Bendalls Engineering in Carlisle.