Bass Pro Shops Acquires Cabela’s;
Capital One to Acquire the CLUB Visa
Credit Card Portfolio
Bass Pro Shops to acquire Cabela’s retail business in a deal valued at $5.5B – Capital One to
acquire the CLUB Visa credit card operation at par value and enter into a 10-year
agreement to become the exclusive co-branded credit card issuer for Cabela’s customers
Retailer Comparison
Transaction Overview
Retail Sales
(2015)
$4.5B1
$3.5B2
U.S. Stores
95
73
Canada Stores
4
10
Geographic Focus
East / Mid-West
West / Mid-West
Credit Card Program Comparison
Issuer
In-House
Product Offering Co-brand only (MC)
Co-brand only (Visa)
Acquisition Offer
$50 (gift card)5
$50 (points)6
In-Store Spend
3% / 5%
2% / 3% / 5%
Out-of-Store
Spend
1%
1%
Other Benefits
-
Experiential Events
3
Cabela’s CLUB Visa Credit Card Performance
Average Receivables, $B
Net Charge-Offs
+13%
1.9% 1.8% 1.7% 1.7%
$3.1
$3.5
$4.5
$3.9
2012 2013 2014 2015
2012 2013 2014 2015
ƒƒ On Oct. 3, 2016, Bass Pro Shops announced it would
acquire Cabela’s for $65.50 per share – a 19%
premium over the Friday, Sept. 30, 2016 share price
ƒƒ Capital One concurrently announced it had entered
into a 10-year credit card issuing agreement with
Bass Pro Shops to issue the Cabela’s CLUB Visa cobranded credit card
ƒƒ Capital One will acquire the Cabela’s CLUB Visa
credit card operation at par value, including $5.2
billion in receivables and other assets, and assume
~$5B in funding liabilities
ƒƒ The transaction is expected to close mid-2017; the
bank and the retailer entered into a revenue and loss
sharing agreement in connection with the program
ƒƒ The BPS and CAB customer loyalty programs
(Outdoor Rewards and Cabela’s CLUB) will remain
unchanged initially, but management noted the
potential to expand the CLUB program over time
First Annapolis Observations
ƒƒ The combined retailer will have a national presence
and a 20% market share4 in the U.S. hunting, camping
and fishing market
ƒƒ Cabela’s is a premier retail credit card program with
best-in-class loss rates (<2%), cardholder loyalty
(~$11k spend / active), in-store acquisition (e.g., CLUB
booths, real-time plastic issuance), and rewards
ƒƒ The acquisition is meaningful for Capital One:
-- Major co-brand win in highly competitive process
-- CAB becomes one of the bank’s largest partners
-- High-credit-quality file represents an opportunity
for deeper underwriting / growth
ƒƒ Introduces possibility of integrating the legacy Bass
Pro credit program in the future depending on retail
strategy (brand, marks, channels) and existing Bank of
America relationship
1
Purchase Volume, $B
NR
NR
$19.1 $20.2
Median FICO Score
793
793
795
794
Forbes. 2 Excludes Financial Services revenue of $503m. 3 Tiered based on
creditworthiness / spend.4According to Jim Duffy of Stifel (per WSJ).
5
After $100 in purchases in the first 90-days. 6 $25 upon approval;
$25 after five transactions in 30-days.
Sources: Company websites; CAB public filings; WSJ; press releases; First Annapolis Consulting research and analysis.
For more information, please contact: John Grund, Partner, [email protected]; David Woynerowski, Partner, [email protected];
Ryan Douglas, Manager, [email protected]; or Jeff Kalski, Associate, [email protected]
U.S. Headquarters
Three Park Place, Suite 200 l Annapolis, Maryland 21401
P: 410.855.8500 l [email protected]
European Office
Bass Pro Shops Acquires Cabela’s; Capital One to Acquire the CLUB Visa Credit Card Portfolio
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