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Tuesday, March 19, 2013

Blackhawk to go public

Gift card distributor and Safeway Inc. subsidiary Blackhawk Network filed a registration statement with the Securities and Exchange Commission for an initial public offering (IPO) that could raise as much as $200 million for the innovative prepaid card company. Blackhawk did not disclose the number of shares to be offered or the price range for those shares. Safeway said in September 2012 that it planned to take Blackhawk public in the first half of 2013.

Blackhawk will be issuing Class A common stock for the IPO. Safeway owns 96 percent of Blackhawk and will be the primary stockholder from which the shares will be generated. Blackhawk will be listed on the Nasdaq Global Select Market under the symbol "HAWK." The IPO will be managed by Goldman Sachs Group Inc., with Bank of America Corp., Citigroup Inc. and Deutsche Bank AG helping to underwrite it.

It seems like an opportune time for Safeway to spin off Blackhawk. In the SEC filing, the distributor laid out its recent track record. In 2012, it processed 216 million transactions with a load value of $8.5 billion. It facilitates gift card sales for over 500 retailers in the United States primarily through over 100,000 active retail distribution locations.

Blackhawk said its distribution network provides the distributor with "frequent access to a large number of consumers." The company added, "We believe that our payment network offers consumers the most extensive assortment of gift cards and other prepaid products and payment services available in a single shopping location. … The breadth of product categories and depth of our offerings in each category diversify our revenue streams and position us to benefit from shifting consumer trends."

Blackhawk went on to say, "The combination of our broad range of products and leading consumer brands, our extensive footprint of high-traffic distribution partners and our frequent access to a large consumer base creates strong, self-reinforcing network effects."

Blackhawk expects future growth to come from enhancing the productivity of its distribution partners by expanding in-store retail displays, utilizing marketing programs and direct-to-store fulfillment solutions, and enhancing loyalty and reward programs by including prepaid card offers.

Blackhawk also said it is expanding its content via "localization initiatives" designed to tailor products and services to individual markets and locales. Furthermore, the distributor is expanding internationally, including in Brazil, Korea and, soon, China. Closer to home, Blackhawk recently opened a customer support center in Reno, Nevada, which will have a staff of 60 employees. end of article

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