Silver Lake and P2 Capital Partners to buy Blackhawk Network for $3.5bn
US investment firms Silver Lake and P2 Capital Partners will acquire Blackhawk Network in an all-cash transaction for $3.5 billion, which includes its debt.
Blackhawk operates a physical and digital gift card and prepaid payments network, which it says connects more than 1,000 brands to over 244,000 retail distribution locations and online channels. It was acquisitive itself, as last year the California-based company bought digital gifting specialist CashStar for approximately $175 million in cash.
This latest deal with the two US investment firms comes quickly on the heels of Blackhawk and Alipay teaming up. The idea is to expand Alipay’s mobile payment offerings to participating US retailers. Using Blackhawk’s technology, Blackhawk’s network of retail partners can choose to offer their services to visiting Chinese travelers. Blackhawk intends to roll out the service in select participating retailers beginning January 2018.
Away from that, and upon completion of the transaction with Silver Lake and P2 Capital Partners, Blackhawk will operate as a private company under the leadership of the current management team.
Blackhawk’s board of directors has unanimously approved the definitive merger agreement and recommends that stockholders vote in favour of the transaction.
The agreement has debt and equity financing, including an approximately $1.7 billion equity commitment from Silver Lake. P2 Capital Partners, which owns approximately 5.4% of Blackhawk’s outstanding common stock, has committed to vote in favour of the proposed transaction.
Under the terms of the agreement, Blackhawk stockholders will receive $45.25 per share in cash upon closing of the transaction, which is expected in mid-2018.
Barclays, Bank of America Merrill Lynch, affiliates of Goldman Sachs and JP Morgan are acting as financial advisors to Silver Lake and are providing debt financing to Blackhawk in connection with the transaction. Citi is also providing debt financing to Blackhawk.
Silver Lake says it has about $39 billion in combined assets under management and committed capital and a team of approximately 100 staff located in Silicon Valley, New York, London, Hong Kong and Tokyo. Its current portfolio includes firms such as Alibaba, Dell and Symantec.
P2 Capital Partners is a New York-based firm and its partners include public pension funds, corporate pension funds, endowments, foundations, insurance companies and high net worth investors.