Arcadia has confirmed the sale of a 25% stake in the £2bn Topshop and Topman business to US private equity firm Leonard Green & Partners.

Negotiations to complete the deal were revealed earlier this week and put Topshop and Topman alongside the likes of J Crew and Whole Foods in LGP’s private equity stable.

The transaction, which was completed yesterday, values the business at £2bn and means the Arcadia Group now has no bank debt and is in positive cash.

Arcadia said being debt free meant it had the “flexibility to look at other opportunities to consolidate or acquire, either on our own or in partnership with LGP, who have substantial capital available in their new fund”, owner Sir Philip Green said.

He added: “Under my family’s ownership, we have continued to invest in and grow the Topshop and Topman brands. Having had extensive dialogue over several months, the board felt that LGP becoming our partner would be extremely beneficial. Their experienced management teams and knowledge of retail in the US will greatly assist Topshop and Topman with their global expansion.

“Both the Topshop and Topman businesses are very cash generative, and with LGP alongside us, our plan is to step up our international investment programme as relevant locations present themselves in the US and around the world.”

Green said all of the Arcadia businesses continue to be invested in.