Safeway’s Blackhawk Plans to Raise Up to $220 Million in IPO

Blackhawk Network Holdings Inc., the gift-card provider owned by grocer Safeway Inc. (SWY), plans to raise as much as $220 million in a U.S. initial public offering.

The company will offer 10 million shares for $20 to $22 each, Pleasanton, California-based Safeway said in a statement today. The IPO will consist of shares sold by existing stockholders only, it said.

Safeway said last year that it planned to sell a minority stake in the gift-card provider. Blackhawk’s products include prepaid cards to restaurants, retail and grocery stores in the U.S. and 18 other countries.

At the midpoint of the offering range, Blackhawk would be valued at $1.09 billion, according to a filing today with the U.S. Securities and Exchange Commission.

Revenue at the second-largest U.S. grocery-store chain increased 1.2 percent to $13.8 billion during the three months ended Dec. 29, Safeway said in a statement on Feb. 21. Higher gift and prepaid card sales helped fuel a 0.8 percent gain in identical-store sales, excluding fuel, Safeway said.

Blackhawk’s revenue rose 28 percent to $959.1 million last year as the company added customers, according to the filing. About 15 percent of the 2012 sales came from Blackhawk’s international business, which includes the U.K. and Australia, The gift-card provider plans to start selling in China this year, the filing showed.

The company said it applied to list shares on the Nasdaq Global Select Market under the symbol “HAWK.” The IPO will be led by Goldman Sachs Group Inc., Bank of America Corp., Citigroup Inc. and Deutsche Bank AG.

Safeway rose 1.2 percent to $25.22 at the close in New York. The shares have gained 28 percent in the past 12 months, while the Standard & Poor’s 500 Index has advanced 13 percent.

Kroger Co. (KR) is the largest U.S. supermarket chain.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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