Capital One Financial plans to start issuing credit cards for the outdoor equipment chain Cabela's under a deal connected with the retailer's expected sale to Bass Pro Shops.
McLean, Va.-based Capital One announced a 10-year exclusive agreement Monday to issue co-branded credit cards to customers of Cabela's, which operates 75 U.S. stores.
Under the deal, Capital One will also purchase Cabela's credit card operation, which includes roughly $5.2 billion in credit card receivables and $5 billion in associated funding liabilities, Capital One said in a press release.
Cabela's Club credit cards are currently issued by World's Foremost Bank, a $5.6 billion-asset institution that is a subsidiary of Sidney, Neb.-based Cabela's.
Capital One declined to disclose the terms of the agreement. A Cabela's representative told American Banker that details of the deal will be announced at a later date.
The credit-card deal was announced Monday in tandem with the news that Springfield, Mo.-based Bass Pro Shops plans to buy Cabela's for $5.5 billion.
Capital One said that it expects its own transaction to close in the first half of 2017, subject to the concurrent closing of Bass Pro Shops' acquisition, regulatory approval and other conditions.
Evercore ISI, an investment banking advisory firm, said in a note to clients that the Cabela's deal is consistent with Capital One's strategy to opportunistically grow its private-label credit card business, and should be modestly accretive to the firm's earnings.
Over the last three years, Capital One has generally been quiet in the store-branded credit card business. In 2013, the firm agreed to sell a $7 billion portfolio of Best Buy cards to Citigroup, less than a year after buying them from HSBC.