Shares of Nathan’s Famous Inc (NASDAQ:NATH) surged 9.6% in premarket trading on Wednesday after Smithfield Foods Inc (NASDAQ:SFD) unveiled an all-cash proposal to buy the hot dog brand for $102.00 per share.
The transaction places an enterprise value of roughly $450 million on Nathan’s Famous and would give Smithfield permanent ownership of the brand, which it has licensed since 2014. Under the existing agreement, Smithfield holds exclusive manufacturing and distribution rights for Nathan’s Famous products through 2032.
By bringing the brand fully in-house, Smithfield aims to accelerate expansion across both retail and foodservice channels. The offer values Nathan’s at about 12.4 times trailing twelve-month adjusted EBITDA, or roughly 10 times on a post-synergies basis.
“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.
Smithfield said the acquisition is expected to be immediately accretive to earnings and forecasts around $9 million in annual cost synergies by the second anniversary of the deal’s completion. Closing is targeted for the first half of 2026, subject to approval from Nathan’s Famous shareholders, regulatory sign-offs and other customary conditions.
Board members of Nathan’s Famous representing about 29.9% of outstanding shares have already committed to vote in favor of the deal. The company’s board has also approved the merger agreement and will recommend that shareholders adopt it.
Goldman Sachs is acting as financial adviser to Smithfield Foods, while Jefferies is advising Nathan’s Famous on the transaction.