Seven months after putting its Turkey Hill business on the block, The Kroger Co. has landed a deal to sell it.
Kroger said Tuesday that private equity firm Peak Rock Capital has agreed to buy the Turkey Hill grocery brand for an undisclosed amount. Turkey Hill makes a range of food and beverages, including iced tea, fruit drinks, milk, frozen dairy treats and ice cream at its manufacturing and distribution facility in Conestoga, Pa.
"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," Erin Sharp, group vice president for Kroger Manufacturing, said in a statement. "Throughout this process, we were extremely impressed with Peak Rock's professionalism and vision for the future of the Turkey Hill business. We look forward to working with them to ensure a smooth and successful transition for all parties."
In early August, Kroger had announced that it was exploring strategic options for Turkey Hill, including a possible sale. The Cincinnati-based retail had sold Turkey Hill convenience stores last April in divesting its c-store business to U.K.-based EG Group in a $2.15 billion deal.
Under the agreement with Peak Rock, the Turkey Hill business will continue to operate from the Conestoga facility with its nearly 800 full-time, part-time and seasonal employees.
"Turkey Hill represents an exciting opportunity to invest in a premier brand with an established reputation for quality, flavor variety and authenticity within the large and growing ice cream and refrigerated drinks space,” said Robert Pistilli, managing director of Austin, Texas-based Peak Rock. “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 stand-alone entity and partnering with Turkey Hill's management team to drive significant growth through continued product innovation."
Kroger said it expects the transaction to close during its fiscal first quarter, pending regulatory approval and other customary closing conditions. The company currently operates 38 food manufacturing plants, including 19 dairies.
"We believe that Turkey Hill represents an excellent platform for growth through near-term organic initiatives and strategic acquisitions,” stated Peak Rock CEO Anthony DiSimone. “We will be aggressively pursuing complementary acquisitions to extend the product and brand portfolio."
Peak Rock's current investments in the food and beverage sector include Berner Food & Beverage, a manufacturer of dairy-based beverages and shelf-stable snacks; Diamond Crystal Brands, a manufacturer and distributor of portion control and single-serve foods and beverages; Gold Coast Bakeries, a maker of specialty and organic breads, buns and rolls; Louisiana Fish Fry, a maker of branded, Louisiana-inspired food products; Pretzels Inc., a supplier of pretzels and snack products; Sweet Harvest Foods, a producer and distributor of honey; and TNT Crust, a manufacturer of pizza crusts.