CINCINNATI and AUSTIN, Texas, March
19, 2019 /PRNewswire/ -- The Kroger Co. (NYSE: KR) and Peak Rock Capital, a leading middle-market private equity firm
based in Austin, Texas, today 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 Turkey Hill business out of its
large Conestoga, Penn., 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."
Robert Pistilli, Managing Director of Peak Rock Capital, said, "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. 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."
Anthony DiSimone, Chief Executive Officer of Peak Rock Capital, added, "We believe that Turkey
Hill represents an excellent platform for growth through near-term organic initiatives and strategic acquisitions. We will be
aggressively pursuing complimentary acquisitions to extend the product and brand portfolio."
Turkey Hill produces a full line of popular iced teas, fruit drinks, milk, frozen dairy treats and a variety of ice cream
products at its manufacturing and distribution facility.
Kroger announced in August 2018 its intention to explore strategic options for its Turkey Hill
business, including a potential sale.
Closing is expected during Kroger's first quarter and the after-tax proceeds will be used to reduce debt.
Additional Information
The transaction is subject to customary closing conditions, including expiration or termination of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The company expects the transaction to close
quickly.
Goldman Sachs & Co. LLC is acting as exclusive financial advisor to Kroger.
About Kroger
At The Kroger Co. (NYSE: KR), we are dedicated to our Purpose: to Feed the Human Spirit™. We are nearly half a
million associates who serve nine million customers daily through a seamless digital shopping experience and 2,800 retail food
stores under a variety of banner names, serving America through food inspiration and uplift, and creating #ZeroHungerZeroWaste
communities by 2025. To learn more about us, visit our newsroom and investor relations site.
About Peak Rock Capital
Peak Rock Capital is a leading middle-market private investment firm that makes equity and debt investments in
companies in North America and Europe. Peak Rock focuses on
investing in opportunities where it can support senior management in driving rapid growth and profit improvement through
operational and strategic change. Peak Rock's principals have deep expertise in complex situations, carve-outs, and cross border
transactions, with the ability to provide tailored capital solutions and close transactions quickly where speed and certainty are
priorities. For further information about Peak Rock Capital, please visit www.peakrockcapital.com.
This press release contains forward-looking statements, as that term is defined in the Private Securities Litigation Reform
Act of 1995, about the future performance of Kroger. These statements are based on management's assumptions and beliefs in light
of the information currently available to it. These statements are indicated by words such as "plans" and similar words.
The closing of the transaction will be dependent upon approval receipt of all necessary regulatory approvals and the satisfaction
or waiver of the conditions to closing. Various uncertainties and other factors could cause actual results to differ
materially from those contained in the forward-looking statements. These include the specific risk factors identified in "Risk
Factors" and "Outlook" in Kroger's annual report on Form 10-K for our last fiscal year and any subsequent filings, as well as the
following:
Our ability to use free cash flow to continue to maintain our investment grade debt rating and repurchase shares, pay
dividends, and fund capital investments, could be affected by unanticipated increases in net total debt, our inability to
generate free cash flow at the levels anticipated, and our failure to generate expected earnings.
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SOURCE The Kroger Co.