Bass Pro Shops will acquire Cabela’s for $5.5 billion, both companies confirmed Monday morning.
According to a press release from Cabela’s on Monday morning, the companies have entered an agreement in which Bass Pro Shops will acquire Cabela’s for $65.50 per share in cash, representing an aggregate transaction value of approximately $5.5 billion. The deal is expected to close in the first half of 2017.
Cabela’s was founded by Dick, Mary and Jim Cabela in 1961. It has 19,000 "outfitters" operating in 85 stores in the United States and Canada. In the press release, Cabela’s officials said the stores, catalog business and e-commerce operations will blend seamlessly with Bass Pro and White River Marine Group, both of which were founded by Johnny Morris in 1972 and 1978, respectively.
Cabela’s employs about 2,000 of the roughly 7,000 residents in Sidney. It also employs hundreds of individuals across the state.
Cabela’s has call centers in North Platte, Kearney and Grand Island, a returns processing center in Oshkosh and stores in Kearney and La Vista. The World’s Foremost Bank, which handles Cabela’s CLUB credit card accounts, is also headquartered in Lincoln.
Gary Person, CEO of the North Platte Area Chamber of Commerce and Development Corporation, said he’s been keeping a close eye on the situation. Person was Sidney’s city manager before moving to North Platte for his current position a year ago.
Person said that during his time in Sidney, the city worked directly with Cabela’s on numerous occasions to spur community growth.
"It’s amazing in this day and age how quickly things can transpire and create change," Person said. "In the final three years I was in Sidney, we did nearly $100 million of projects directly with Cabela’s as it relates to a new corporate office expansion at the interstate, redevelopment of their downtown former headquarters and two very significant housing developments."
Bass Pro Shops officials said they appreciate and understand "the deep ties between Cabela’s and the community of Sidney" and will be keeping important "bases of operations" in Sidney and Lincoln. They said they hope to maintain the connections to those communities and with the employees there.
A call requesting comment regarding the other Nebraska locations including North Platte’s call center hasn’t been returned.
Person said only time will tell what the merger means for Lincoln’s credit card division and for the jobs in western Nebraska.
"We have concerns as well, as it relates to their call center in North Platte," Person said, adding that the chamber will be proactive will "do everything we can to have those jobs stay here."
He said the chamber plans to reach out to the new ownership to ease the transition and work through any issues. Person said he doubts anyone has solid answers this soon in the transition, noting that the situation will likely remain "fluid" for awhile.
"The only ‘sure thing’ in today’s world, unfortunately, is that there is ‘no sure thing,’" Person said.
Gov. Pete Ricketts issued a statement Monday morning saying the Department of Economic Development and the Department of Labor are ready to assist area residents and communities in finding opportunities.
"I know this change brings significant disruption and uncertainty for the citizens of Cheyenne County and the surrounding communities," Ricketts said, adding that "Nebraskans have faced challenges in the past, and we overcome them by working together. We will face these new circumstances by working together as well."
According to Cabela’s, the transaction agreements were unanimously approved by Cabela’s board of directors following a comprehensive review of strategic and financial alternatives.
"Cabela’s is pleased to have found the ideal partner in Bass Pro Shops," said Tommy Millner, Cabela’s chief executive officer. "Having undertaken a thorough strategic review, during which we assessed a wide variety of options to maximize value, the board unanimously concluded that this combination with Bass Pro Shops is the best path forward for Cabela’s, its shareholders, outfitters and customers. In addition to providing significant immediate value to our shareholders, this partnership provides a unique platform from which our brand will be extremely well positioned to continue to serve outdoor enthusiasts worldwide for generations to come."
The transaction will be completed through a cash merger and is subject to approval by Cabela’s shareholders, as well as regulatory approvals and other customary closing conditions, according to Cabela’s press release.
Immediately prior to the sale’s closing, Capital One, National Association, a subsidiary of Capital One Financial Corp., will acquire certain assets and assume certain liabilities of Cabela’s World’s Foremost Bank. The cash proceeds from this transaction will remain with Cabela’s until it is acquired by Bass Pro Shops.
Capital One will service the Cabela’s CLUB branded credit card.
According to the press release, Cabela’s CLUB points and Bass Pro Shops Outdoor Rewards points will be unaffected. Capital One intends to continue to operate the Cabela’s CLUB servicing center in Lincoln, the release said.
"We are pleased Capital One agreed to keep their acquired operations in Lincoln, and we encourage Bass Pro to consider the same," said Ricketts.
Bass Pro Shops secured preferred equity financing from the Merchant Banking Division of Goldman Sachs and Pamplona to facilitate the transaction. Goldman Sachs has committed $1.8 billion and Pamplona has committed $600 million, according to the statement.
Once the transaction closes, Bass Pro Shops intends to grow the Cabela’s brand, the company said.
"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 Johnny Morris, founder and CEO 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. We have enormous admiration for Cabela’s, its founders and outfitters, and its loyal base of customers. We look forward to continuing to celebrate and grow the Cabela’s brand alongside Bass Pro Shops and White River as one unified outdoor family."
Morris will continue as CEO and majority shareholder of the new entity, which will remain a private company.