Bass Pro Shops to Acquire Cabela’s, a Rival Outdoor Retailer

2016-10-03 14:32:11

 

Bass Pro Shops to Acquire Cabela’s, a Rival Outdoor Retailer

Bass Pro Shops has agreed to acquire Cabela’s for $5.5 billion, combining two of the most well-known retailers for hunting and fishing gear.

Bass Pro Shops — which remains privately held, largely by Johnny Morris, who started the company 45 years ago in his father’s liquor store near Springfield, Mo. — plans to purchase Cabela’s for about $65.50 a share in cash, according to a statement on Monday. Cabela’s said on Dec. 1 that it was exploring strategic alternatives. The takeover price represents a 40 percent premium to where its shares were trading that day.

The deal marries Cabela’s 19,000 employees with Bass Pro Shop’s 20,000, and adds 85 Cabela’s stores to Bass Pro Shops’ 99. Bass Pro Shops also operates the White River Marine Group, which makes fishing boats.

“Today’s announcement marks an exceptional opportunity to bring together three special companies with an abiding love for the outdoors and a passion for serving sportsmen and sportswomen,” said Mr. Morris, the chief executive of Bass Pro Shops. “The story of each of these companies could only have happened in America, made possible by our uniquely American free enterprise system.”

Mr. Morris will continue as chief executive and majority shareholder of the company, which will be privately held.

Bass Pro Shops secured $1.8 billion in financing from the merchant banking division of Goldman Sachs and $600 million from the private equity firm Pamplona Capital Management. Goldman Sachs advised its merchant bank on the transaction, while JPMorgan advised Bass Pro Shops. Guggenheim Securities was Cabela’s banker for the transaction. Goldman Sachs is also providing debt financing for the transaction, in addition to Bank of America, Wells Fargo, Citigroup, RBC Capital Markets and UBS.

Bass Pro Shops will also take on a partnership with Capital One Financial Corporation to originate and service Cabela’s co-branded credit card. Right before the closing of the transaction, Capital One will acquire some assets and liabilities of Cabela’s World’s Foremost Bank; the cash from this transaction will stay on Cabela’s balance sheet until it’s acquired by Bass Pro Shops.

Cabela’s was founded in Sidney, Neb., by Dick, Mary and Jim Cabela in 1961. Bass Pro Shops indicated that it would “maintain important bases of operations in Sidney and Lincoln.” The transaction, subject to regulatory and Cabela’s shareholders’ approvals, is expected to close during the first half of next year.

Latham & Watkins provided legal counsel to Bass Pro Shops, with expert assistance from O’Melveny & Myers. Sidley Austin and Koley Jessen served as Cabela’s legal counsel.

The Kessler Group and Credit Suisse provided financial advice to Capital One, while Wachtell, Lipton, Rosen & Katz, as well as Chapman and Cutler, worked as its legal adviser.

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