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Safeway Gift-Card Provider Blackhawk Raises $230 Million in IPO

Blackhawk Network Holdings Inc., the gift-card provider owned by grocer Safeway Inc. (SWY), raised $230 million in its initial public offering, pricing the shares above the marketed range.

The company sold 10 million shares at $23 each, according to a statement yesterday, after the Pleasanton, California-based company offered them for $20 to $22 each. Blackhawk will start trading today, listed on the Nasdaq Stock Market under the symbol HAWK.

At the IPO price, Blackhawk’s market value would be about $1.2 billion. Safeway, the second-largest U.S. grocery-store chain, 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.

Blackhawk’s revenue rose 28 percent to $959.1 million last year as the company added customers, according to regulatory filings. About 15 percent of the 2012 sales came from Blackhawk’s international business, which includes operations in countries such as the U.K. and Australia.

The company sold a 19 percent stake in the IPO, the offering terms show. Safeway may prevent Blackhawk from selling additional stock so that the parent can maintain the 80 percent ownership required to complete a tax-free spinoff, the filing shows. Safeway has told Blackhawk that it currently has no plans for such a spinoff, according to the filing.

Goldman Sachs Group Inc., Bank of America Corp., Citigroup Inc. and Deutsche Bank AG led the sale.

To contact the reporter on this story: Julie Alnwick in New York at jalnwick@bloomberg.net

To contact the editor responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net

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