Peak Rock Buys Kroger’s Turkey Hill
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Peak Rock Buys Kroger’s Turkey Hill

Peak Rock Capital has agreed to acquire the Turkey Hill business from The Kroger Co. Kroger has been exploring its strategic options for Turkey Hill since August 2018.

Turkey Hill produces a full line of iced teas, fruit drinks, milk, frozen dairy treats and a variety of ice cream products which are sold under the Turkey Hill brand in 49 states. The business has nearly 800 full-time, part-time and seasonal employees with a manufacturing and distribution facility near Lancaster in Conestoga, PA. Turkey Hill began as a dairy farm in 1931 and was purchased by Kroger in 1985 (www.turkeyhill.com).

“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, a managing director of 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 standalone entity and partnering with Turkey Hill’s management team to drive significant growth through continued product innovation.”

“We believe that Turkey Hill represents an excellent platform for growth through near-term organic initiatives and strategic acquisitions. We will be aggressively pursuing complementary acquisitions to extend the product and brand portfolio,” said Anthony DiSimone, chief executive officer of Peak Rock Capital.

Peak Rock makes debt and equity investments of $30 million to $300 million in middle market companies with revenues from $50 million to $1 billion and enterprise values from $50 million to $750 million. Sectors of interest include business and tech-enabled services, consumer, distribution and logistics, energy and related services, food and beverage, healthcare, industrials and manufacturing, metals, and technology. The firm is based in Austin (www.peakrockcapital.com).

The buy of Turkey Hill is Peak Rock’s tenth investment in the food and beverage industry.  The firm’s current investments in the food space include Pretzels, Inc., a supplier of pretzels and other extruded snack products (October 2018); Louisiana Fish Fry, a manufacturer and supplier of branded, Louisiana-inspired food products (October 2018); TNT Crust, a manufacturer of pizza crusts (August 2018); Sweet Harvest Foods, a producer and distributor of honey (December 2016); Diamond Crystal Brands, a manufacturer and distributor of portion control and single-serve food and beverage products (May 2016); Gold Coast Bakeries, a manufacturer of specialty and organic breads, buns, and rolls (July 2017); and Berner Food & Beverage, a manufacturer of dairy-based shelf-stable snacks and beverages (November 2015).

“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,” said Erin Sharp, group vice president for Kroger Manufacturing. “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.”

The Kroger Co. (NYSE: KR) is one of the largest supermarket chains in the United States with annual revenues of more than $120 billion. The company is headquartered in Cincinnati (www.kroger.com).

Goldman Sachs (www.goldman.com) was the financial advisor to Kroger.

Closing of this transaction is expected during Kroger’s first quarter which ends in April.

© 2019 Private Equity Professional | March 20, 2019

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