The company's two largest shareholders -- Gratco LLC and Holiday Stationstores Inc -- will buy shares held by the remaining shareholders for $5.15 a share, the St. Paul, Minnesota-based company said in a statement.
The retailer of hunting, fishing and camping supplies had 24.2 million shares outstanding as of Sept. 8, according to Reuters Data.
Gander Mountain's board said it took the decision after weighing costs related with ongoing regulatory requirements, which outweigh the benefits of a public company status.
It expects the going private transaction to be completed in early 2010.
The company intends to reduce the existing number of shareholders to below 300, to make it eligible for delisting, it said.
To do this, the company will effect reverse and forward stock splits to reduce the number of shares outstanding and cash out fractional shares.
Shares of the company closed at $3.82 Friday on Nasdaq.
(Reporting by Shradhha Sharma in Bangalore; Editing by Unnikrishnan Nair)