Gloucester-based housing and care provider Mears has sold the care side of its business to Cera Care Operations Holdings.

Under the deal, Mears will receive £4 million on completion, and a further £1m over the coming 12 months. Cash from the sale will be used to cut Mears' debts.

Mears said the sale will ensure continuity for customers and staff, at a challenging time for the care sector.

Around 1,500 Mears employees from 18 branches will leave the group and move to Cera.

David Miles, chief executive of Mears, said: "We can be extremely proud of our achievements in care, in terms of improving service delivery, workforce pay and conditions, but the sector remains underfunded and it has proved impossible to generate an adequate financial return. 

"I am pleased to have completed the disposal of the England and Wales Domiciliary Care business to Cera Care. This will provide continuity for our customers and employees, at the same time as enabling us to focus our efforts where we can deliver superior returns for shareholders."