Cook bacon and ham in a large nonstick skillet over medium-high heat 12 minutes or until bacon is crisp; remove bacon and ham, and drain on paper towels.
Cook grits according to package directions.
Add cheese and butter; beat at medium speed with an electric mixer until blended and cheese melts.
Beat in eggs, milk, and pepper.
Stir in bacon mixture.
Pour into a lightly greased 13- x 9-inch baking dish.