In a merger that the companies say “could only have happened in America,” Eastern-based Bass Pro Shops is acquiring Western-based retailer Cabela’s — the self-styled “World’s Foremost Outfitter” — in a $4.5 billion cash deal. Bass also started and operates White River Marine Group, which markets boat, motor and trailer packages.
“The deal unites two outdoor supply superstores aimed at catering to every need of those who hunt, fish, camp or otherwise venture into the wilderness. It was not immediately clear whether the acquisition would result in any store closures,” Nathan Bomey writes for USA Today.
“The companies are pioneers of a concept now-coveted by retailers of all stripes: stores that double as both shopping centers and entertainment destinations. Both Cabela’s and Bass Pro Shops have earned cult followings for their oversize outposts filled with hunting, fishing, and outdoors gear, as well as ornate taxidermy and fishing exhibits,” write Sara Germano and Kevin Helliker for the Wall Street Journal.
“The deal would create a national chain with more than 180 locations, roughly 40,000 workers and control of more than 20% of the $50 billion U.S. hunting, camping, and fishing market, according to Stifel analyst Jim Duffy,” they report.
Cabela’s currently has over 19,000 “outfitters” operating 85 specialty retail stores, primarily in the western U.S. and Canada and Bass Pro Shops promises to “celebrate and grow” the brand. Bass Pro Shops itself has 99 stores and Tracker Marine Centers located primarily in the eastern regions of the U.S. and Canada. Its founder and CEO, Johnny Morris, will continue as CEO and majority shareholder of the new entity, which will remain private.
“A driving force behind this agreement is the highly complementary business philosophies, product offerings, expertise and geographic footprints of the two businesses,” according to the release announcing the deal.
Another driving force was Elliott Associates, the activist hedge fund that disclosed an 11.1% stake Cabela’s a year ago and has been pressuring the company to pursue strategic alternatives. “Cabela’s has struggled with declining sales of apparel and footwear and has reported same-store sales growth in only one quarter in more than three years,” Johanna Bennett reports for Barron’s, making it unlikely that anyone else will come along with a better offer than Bass, which gives shareholders a premium of 19.2% to Cabela’s closing share price on Sep. 30.
Bass maintains headquarters in Springfield, Mo., where, in 1972, Morris started and ran the business for 13 years from eight square feet of space at the back of his father's liquor store. Forbes estimates he is now worth $3.9 billion.
Morris has “promoted conservation efforts through his foundation, which operates Dogwood Canyon Nature Park, a 10,000-acre park in Lampe, Mo.,” the Wall Street Journal’s Imani Moise writes in a profile. He also has expanding the Wonders of Wildlife Museum and Aquarium on the campus of his flagship Springfield store. “The project, which features a 1.3 million gallon aquarium and Teddy Roosevelt’s hunting cabin, cost more than $100 million …, according to the Springfield News-Leader,” Moise reports.
Cabela’s was founded in 1961 by Dick, Mary and Jim Cabela “at the family kitchen table when Dick decided to place an ad to sell fishing flies,” and is headquartered in Sidney, Neb.
Its World’s Foremost Bank credit card division, which employs more than 500 people in Lincoln, is being acquired by Capital One immediately prior to closing, which is expected to take place in the first half of 2017. “Current card users are unaffected, the companies said, and their reward points will remain intact,” Lauren Gensler reports for Forbes.
Saying it “appreciates and understands the deep ties between Cabela’s and the community of Sidney,” Bass says it “intends to continue to maintain important bases of operations in Sidney and Lincoln, Neb.,” but locals are nonetheless upset.
“Around here, it stings, say people in this company town of 6,800 — around 2,000 of whom work for the homegrown outdoors retailer, now on Fortune magazine’s list of the U.S.’s largest companies,” write Brad Davis, Paige Yowell and Paul Hammel for the Omaha World-Herald.
“But worse than the sting is now the worry: What will happen to Cabela’s employees — and to the town itself …,” they write in a story topped by staff photographer Brendan Sullivan’s photograph of the sun setting near Cabela’s headquarters.