SMITHFIELD, Va. – Smithfield Foods, a leading American producer of value‑added packaged meats and fresh pork, announced this week that it has reached a definitive merger agreement with Nathan’s Famous. Under the deal, Smithfield will acquire all outstanding shares of Nathan’s Famous for $102.00 per share in cash, valuing the company at approximately $450 million.
Since March 2014, Smithfield Foods has held the exclusive license from Nathan’s Famous to manufacture, distribute, market, and sell “Nathan’s Famous” branded hot dogs, sausages, corned beef, and certain related products in the retail channel throughout the United States, Canada, and Sam’s Club locations in Mexico. Smithfield is also licensed to produce and distribute Nathan’s Famous hot dog and sausage products for the foodservice channel. This licensing agreement is set to expire in March 2032.
Successfully closing the acquisition will secure Smithfield’s rights to this iconic brand into perpetuity and enable it to maximize the Nathan’s Famous brand growth across the retail and foodservice channels.
“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.”
Eric Gatoff, CEO of Nathan’s Famous said, “This combination is a natural fit and provides a compelling valuation for Nathan’s Famous stockholders. 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.”
The acquisition of Nathan’s Famous will be immediately accretive to Smithfield’s adjusted diluted earnings per share from continuing operations attributable to Smithfield and is expected to bolster its growth strategy by:
- securing long-term sales and cash flows from the iconic Nathan’s Famous brand into perpetuity;
- driving growth of the high margin Packaged Meats segment by harnessing the powerful Nathan’s Famous brand and fueling it with an expanded portfolio of innovative products that build customer awareness across Smithfield’s well-established retail and foodservice sales channels;
- increasing foodservice sales volume by placing this channel under the direct management of Smithfield’s expert team and leveraging Smithfield’s established, scaled infrastructure; and
- improving operating efficiencies by generating anticipated annual run-rate cost synergies of approximately $9 million by the second anniversary of the transaction closing.
