Smithfield Foods to Acquire Iconic Hot Dog Brand Nathan's Famous

Core Viewpoint - Smithfield Foods has announced a definitive merger agreement to acquire Nathan's Famous for $102.00 per share, totaling an enterprise value of approximately $450 million, which is expected to enhance Smithfield's brand portfolio and growth opportunities in the packaged meats segment [1][4][6]. Group 1: Acquisition Details - Smithfield Foods will acquire all issued and outstanding shares of Nathan's Famous in an all-cash transaction valued at $102.00 per share [6]. - The transaction is expected to close in the first half of 2026, pending approval from Nathan's Famous shareholders and other customary conditions [7][9]. - The acquisition will be funded by cash on hand and is not subject to a financing contingency [7]. Group 2: Strategic Implications - The acquisition will secure Smithfield's rights to the Nathan's Famous brand indefinitely, allowing for maximized growth across retail and foodservice channels [3][8]. - Smithfield anticipates achieving annual cost synergies of approximately $9 million by the second anniversary of the deal closing [4][8]. - The transaction represents a valuation of approximately 12.4 times Nathan's Famous's last twelve months adjusted EBITDA and about 10.0 times post-synergies [4]. Group 3: Management Perspectives - Smithfield's President and CEO, Shane Smith, emphasized that the acquisition is a significant step in owning top brands within their packaged meats portfolio and unlocking new growth opportunities [4]. - Nathan's Famous CEO, Eric Gatoff, stated that the merger is a natural fit and offers a compelling valuation for shareholders, highlighting Smithfield's commitment to the brand [5]. Group 4: Financial Overview - Nathan's Famous reported an adjusted EBITDA of $36.386 million for the twelve months ended September 28, 2025, indicating a strong financial position prior to the acquisition [28]. - The acquisition is expected to be immediately accretive to Smithfield's adjusted diluted earnings per share from continuing operations [5]. Group 5: Regulatory and Approval Process - The merger agreement requires approval from Nathan's Famous shareholders, with members owning approximately 29.9% of the shares already agreeing to vote in favor of the transaction [10]. - The transaction is subject to regulatory approvals, including antitrust considerations and other customary closing conditions [9].