Catering supplier Brakes has acquired the chilled distribution division of troubled Peter's Food Service, a principal supplier to the Compass Group.
Brakes, which already supplies Compass with frozen food, has been given a five- year contract to distribute chilled and frozen products to its outlets.
Peter's employed around 700 staff and operated nine distribution depots, including a main site at Tamworth. Brakes said some rationalisation of the business would follow the takeover.
The food manufacturing and van sales operations of Peter's Food Service will not be affected by the sale of the company's distribution business.