Blackhawk Snaps up $230 Million in IPO (April 22, 2013)
Blackhawk Network Holdings Inc. exceeded expectations with its initial public offering launched last week, raising $230 million and bringing its market value based on the IPO price to $1.2 billion. The prepaid card provider and third-party distributor owned by Safeway Inc. priced 10 million of its shares at $23 each, after Blackhawk’s existing shareholders initially offered the stock for between $20 and $22 a share, which would have netted about $220 million. Blackhawk began trading April 19 under the Nasdaq Stock Market symbol HAWK, and the stock closed Friday at $26, up 23 percent.
Safeway last year said it planned to sell a minority stake in the company and in its offering terms says it sold a 19 percent stake in the IPO. Safeway may retain an 80 percent ownership stake, which is required to complete a tax-free spinoff, according to a regulatory filing. Safeway has told Blackhawk it has no plans for a spinoff, the filing said. Goldman Sachs Group, Bank of America Corp., Citigroup Inc. and Deutsche Bank AG led the sale.
The IPO’s success “validates” the strength of the prepaid card industry and suggests the possibility of “increased deal activity” later this year, Philip Philliou, a partner with consulting firm Philliou Partners, tells Paybefore. InComm, Blackhawk’s largest competitor, remains privately held but landed a minority investment of an undisclosed sum from private equity firm Warburg Pincus.
