Blackhawk Completes IPO, Valued At $1.35 Billion

Gift card provider Blackhawk Network Holdings has completed its Initial Public Offering, reaching a market capitalization of $1.35 billion after raising $230 million and finishing with shares above the marketed range, according to Bloomberg.

Blackhawk shares rose around 13 percent to reach $26.01, while originally priced at $23 each. Existing shareholders of Safeway-owned Blackhawk had offered the stock for between $20 and $22. Goldman Sachs, Citigroup, Bank of America and Deutsche Bank AG led the sale.

Blackhawk makes around 84 percent of its revenue by offering gift cards from commercial giants such as Amazon, Macy’s and Starbucks, and has seen its adjusted operating revenue jump nearly triple to $448.3 million since 2008, as Reuters points out.

The company sold about 19 percent of its stake in the IPO, but is unlikely to sell more. Bloomberg notes that Safeway needs to maintain an 80 percent ownership in Blackhawk in order to qualify for a tax-free filing, although Safeway reportedly has no plans to do so.

Part of Blackhawk’s recent success is due to its new digital wallet service, “Blackhawk Digital,” which the company launched back in November of 2012. The company also has its own debit card, PayPower, and sells prepaid cards from two of payments’ largest prepaid platforms in Green Dot and Netspend Holdings.

Blackhawk earned $48.2 million in 2012, representing a profit jump of 31.9 percent and a sales boost of nearly 28 percent over 2011.

Rumors of a Blackhawk IPO began in September 2012, while the company first began filing for its public offering in March 2013. PYMNTS.com reported at the time that Blackhawk sought an IPO of around $200 million.

The company will trade under the NASDAQ symbol “HAWK.”

Read more on Bloomberg here and at Reuters here.