Smithfield Foods (SFD) and Nathan’s Famous, Inc. Announce About Definitive Merger Agreement

Smithfield Foods, Inc. (NASDAQ:SFD) is one of the Best FMCG Stocks to Invest In According to Analysts. On January 21, Smithfield Foods, Inc. (NASDAQ:SFD) and Nathan’s Famous, Inc. announced that they entered into a definitive merger agreement, wherein former will acquire all of latter’s issued and outstanding shares. The acquisition will be done at $102.00 per share in cash, resulting in an enterprise value of ~$450 million.

Notably, the acquisition of Nathan’s Famous happens to be a strong step, which will help Smithfield Foods, Inc. (NASDAQ:SFD) to own all of the top brands in its Packaged Meats portfolio. Also, it will help in unlocking new growth opportunities for its largest segment. This transaction reflects a valuation of ~12.4x Nathan’s Famous’s adjusted EBITDA on the LTM basis and a multiple of ~10.0x post-synergies.

By the second anniversary of this deal closing, Smithfield Foods, Inc. (NASDAQ:SFD) expects to achieve annual cost synergies to the tune of ~$9 million.

In a separate update, on January 21, Bank of America Securities analyst Peter Galbo maintained a “Buy” rating on the company’s stock, setting a price objective of $29.00.

Smithfield Foods, Inc. (NASDAQ:SFD) is an American food company, which has a leading position in packaged meats and fresh pork products. The company’s portfolio consists of high-quality iconic brands, like Smithfield®, Eckrich® and Nathan’s Famous®, among many others.

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Disclosure: None. This article is originally published at Insider Monkey.