The Kroger Co., Cincinnati, and Peak Rock Capital, an Austin, Texas-based middle-market private equity firm, announced a definitive agreement for the sale of Kroger's Turkey Hill business to an affiliate of Peak Rock Capital.

As part of the sale agreement, the Peak Rock Capital affiliate will continue to operate the business out of Turkey Hill's large Conestoga, Pa., facility with its nearly 800 full-time, part-time and seasonal associates and under the same recognizable Turkey Hill brand.

"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."

Turkey Hill produces a full line of iced teas, fruit drinks, milk, frozen dairy treats and a variety of ice cream products at its manufacturing and distribution facility, the companies noted. Kroger announced in August 2018 its intention to explore strategic options for its Turkey Hill business, including a potential sale.

"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 Peak Rock Capital. “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."

Closing is expected during Kroger's first quarter, and the after-tax proceeds will be used to reduce debt.

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