Smithfield Foods has entered into a merger agreement to acquire Nathan’s Famous Inc. for $102.00 per share in cash, representing an enterprise value of about $450 million.
The transaction will secure Smithfield’s rights to the iconic all-beef hot dog brand into perpetuity. The company has held an exclusive license from Nathan’s Famous since March 2014 to manufacture, distribute, market and sell Nathan’s Famous branded hot dogs, sausages, corned beef and certain other products through retail channels in the United States, Canada and Sam’s Clubs in Mexico. The license was scheduled to expire in March 2032.
“The Nathan’s Famous acquisition is a meaningful step in the progression of Smithfield Foods allowing us to own all of the top brands in our Packaged Meats portfolio and unlock new growth opportunities for our largest segment,” said Smithfield President and CEO Shane Smith.
“Since entering into our licensing agreement in 2014, we have made significant investments to build and grow the Nathan’s Famous brand. With our manufacturing scale, marketing strength, product innovation capabilities, and retail and foodservice channel expertise, acquiring Nathan’s Famous will allow us to take the brand to new heights.”
The transaction represents a valuation of about 12.4 times Nathan’s Famous’s last 12 months adjusted EBITDA and a multiple of about 10.0 times post-synergies. Smithfield Foods expects to achieve annual cost synergies of approximately $9 million by the second anniversary of the deal closing.
The acquisition will be immediately accretive to Smithfield’s adjusted diluted earnings per share from continuing operations. The transaction is not subject to a financing contingency and will be funded by cash on hand.
The Board of Directors of Nathan’s Famous approved the merger agreement and agreed to recommend that Nathan’s Famous stockholders vote to adopt the merger agreement. Members of the Nathan’s Famous Board who in the aggregate own or control about 29.9 percent of the outstanding shares have entered into a voting agreement to vote their shares in favor of the transaction.
Strategic growth opportunities
Eric Gatoff, CEO of Nathan’s Famous, said the combination is a natural fit. “As a long-time partner, Smithfield has demonstrated an outstanding commitment to investing in and growing our brand while maintaining the utmost quality and customer service standards,” he said.
The acquisition is expected to bolster Smithfield’s growth strategy by securing long-term sales and cash flows from the Nathan’s Famous brand, driving growth of the high-margin Packaged Meats segment and increasing foodservice sales volume by placing this channel under direct management of Smithfield’s team.
Nathan’s Famous distributes its products in 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam and 21 foreign countries through its restaurant system, foodservice sales programs and product licensing activities.
Closing timeline and conditions
The closing is expected to occur in the first half of 2026, subject to satisfaction of certain conditions including approval by holders of a majority of the outstanding Nathan’s Famous common stock, expiration or termination of the applicable waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, approval from the Committee on Foreign Investment in the United States and other customary closing conditions.
The definitive merger agreement permits the Nathan’s Famous Board of Directors to declare and pay two regular quarterly cash dividends during the period pending closing.
Goldman Sachs acted as financial advisor to Smithfield Foods and Hunton Andrews Kurth LLP acted as legal counsel. Jefferies acted as financial advisor and Akerman LLP acted as legal counsel for Nathan’s Famous.
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