Tesco has announced the sale of its Dobbies Garden Centres unit to an investor group led by Midlothian Capital Partners and Hattington Capital, for £217m in cash.
Representing the entire share capital of Dobbies Garden Centres, the proceeds from the sale will be used by Tesco for general corporate purposes.
Tesco claimed that since its acquisition of Dobbies Garden Centres in 2007, the unit has become the UK’s second largest specialist garden centre retailer, operating 35 outlets across Scotland, England and Northern Ireland.
Tesco chief executive Dave Lewis said: "Through their hard work and dedication to customer service, Dobbies colleagues have built a great business, and I would like to thank them for everything they have done.
"It was a difficult decision to sell the business, but we believe this agreement will give Dobbies a bright future, while allowing our UK retail business to focus on its core strengths."
In a joint statement, Midlothian Capital Partners partner Andrew Bracey and Hattington Capital partner Barney Burgess said: "We are delighted to have been chosen by Tesco to take ownership of the Dobbies Garden Centres business. It is a great business with fantastic colleagues.
"We’re very optimistic about the potential of the business, and we look forward to growing the business across the UK from its base in Scotland."
Tesco stated that it will continue to offer a wide selection of home and garden products through its own stores and online.
As at 27 February, the gross assets relating to Dobbies Garden Centres included in the Tesco accounts stood at £255m.
Dobbies Garden Centres’s contribution to Tesco’s reported profit before tax for the year ended 27 February was £17m.