Kroger to divest Turkey Hill business to Peak Rock Capital

Kroger has entered a definitive agreement with Austin-based private equity firm Peak Rock Capital to sell its Turkey Hill business to an affiliate of Peak Rock Capital.

Turkey Hill is engaged in the production of iced teas, fruit drinks and milk at its manufacturing and distribution facility. It also offers frozen dairy treats and a variety of ice cream products.

Peak Rock Capital managing director Robert Pistilli said: “Turkey Hill represents an exciting opportunity to invest in a premier brand with an established reputation for quality, flavour variety, and authenticity, within the large and growing ice cream and refrigerated drinks space.

“We are impressed with the accomplishments of the business under the stewardship of Kroger and look forward to completing a seamless transition of the business to a standalone entity and partnering with Turkey Hill’s management team to drive significant growth through continued product innovation.”

Under the agreement, the Peak Rock Capital arm will continue to run the Turkey Hill business out of its facility in Conestoga, Pennsylvania.

Last year, Kroger announced that it is exploring strategic options for its Turkey Hill business, including a potential sale.

Subject to customary closing conditions, the transaction is expected to take place during Kroger’s first quarter. The after-tax proceeds will be used to reduce the retail firm’s debt.

Kroger Manufacturing group vice-president Erin Sharp said: “We believe this is the right step to ensure the Turkey Hill business can meet its full potential and continue to grow its successful ice cream and beverage brands.”

Goldman Sachs is serving as exclusive financial advisor to Kroger on the transaction.