Performance Foods' (NASDAQ:PFGC) stock rose by as much as 10% this morning on the news that it had sold for $880 million cash its fresh cut food division, Fresh Express, the nation's largest producer of bagged salads, to Chiquita (NYSE:CQB). Performance says that the sale will allow it to concentrate on its customized food service business. The company has more than 40,000 different food and food service products, even after the sale of Fresh Express.

The potential for sale of Fresh Express has been a big investment thesis on Performance Foods over the last year, which said not that long ago that it would be looking into strategic alternatives for the division, including a sale. While the sale (and excellent sale price) is ultimately a good thing for Performance Foods, it also represents a failure of management to execute. This is a valuable brand, controlling more than 40% of the bagged salad market, and has a blue-chip list of clients, including Yum! Brands (NYSE:YUM) and McDonald's (NYSE:MCD). Performance has been unable to wring what should have been able to create substantial long-term value for its shareholders.

But at a minimum, the management recognized that it was not succeeding and chose to cut bait. Performance can now go back to its other broadline businesses, in which it has proven to be extremely competitive. Chiquita, for its part, continues to rebound smartly from what was a near-fatal business condition in late 2001 and has made smart moves to diversify away from its core banana business.

Finally, Chiquita's purchase of Fresh Express gives it a big door into some of the largest restaurant chains in the world, giving it a much easier path to compete against Fresh Del Monte (NYSE:FDP), Del Monte (NYSE:DLM), and Dole for its legacy products, including bananas and pineapples.

Just a great example of a transaction that will instantly be beneficial to both sides: Performance Foods gets cash for a division that it proved incapable of running optimally, and Chiquita gets a valuable new addition to its portfolio of food products, a billion dollars or so of annual revenues, and a gold-plated roster of new customers.

Bill Mann owns shares of McDonald's and routinely orders their salads. Funny that particular option wasn't really plumbed in "Supersize Me," eh? The Motley Fool's disclosure policy can be accessed here.