Smithfield Foods (SFD) to Acquire Nathan's Famous (NATH) for $102 Per Share
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2d ago
0mins
Source: seekingalpha
- Merger Agreement: Smithfield Foods has entered into a definitive merger agreement to acquire all outstanding shares of Nathan's Famous for $102 per share in cash, representing an enterprise value of approximately $450 million, indicating strong confidence in the Nathan's brand.
- Brand Rights Secured: This acquisition will secure Smithfield's long-term rights to the Nathan's Famous brand across the U.S., Canada, and Mexico, further enhancing its growth potential in both retail and foodservice markets.
- Financial Valuation: The transaction is valued at about 12.4x Nathan's Famous's last twelve months adjusted EBITDA, with expected annual cost synergies of approximately $9 million by the second anniversary of the deal closing, reflecting the financial rationale behind the acquisition.
- Positive Market Reaction: Following the announcement of the acquisition, Nathan's Famous shares rose over 7% in premarket trading to $99.61, demonstrating market optimism regarding the transaction.
Analyst Views on NATH
About NATH
Nathan’s Famous, Inc. is a licensor, wholesaler and retailer of products marketed under its Nathan’s Famous brand, including its Nathan’s World Famous Beef Hot Dogs. The Company distributes its products in 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and 20 foreign countries. The Branded Product Program segment is engaged in the sale of hot dog products either directly to foodservice operators or to various foodservice distributors who resell the products to foodservice operators. The Product licensing segment includes royalties, from licensing a range of its branded products, including its hot dogs, sausage and corned beef products, frozen French fries and additional products, through retail grocery channels and club stores throughout the United States. The Restaurant operations segment is engaged in the sale of its products at Company-owned restaurants and earns fees and royalties from its franchised restaurants, including its virtual kitchens.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
