Collins Food to Sell Distribution Subsidiary

Collins Food International Inc. has tentatively agreed to sell its Collins Foodservice Inc. subsidiary based in Orange to Staley Continental Inc., a diversified food company based in Rolling Meadows, Ill.

Terms of the cash deal were not revealed.

Collins Foodservice, a food distributor for fast-food restaurant chains in 10 western states, had sales in fiscal 1986 of $270 million. It maintains distribution facilities in the City of Industry, Los Angeles, San Diego and Tracy, Tempe, Ariz., and Portland, Ore.

Following the sale of its distribution subsidiary, Collins Food, which is based in Los Angeles, will become strictly a retail operator and franchiser of about 950 restaurants, including Kentucky Fried Chicken, Naugles and Sizzler, throughout the United States and in four foreign countries.

A Staley spokesman said the deal is expected to close within 90 days. He added that Staley expects to make no immediate changes in Collins Foodservice operations.