Blackhawk Network Holdings

Blackhawk Network Holdings Inc. is a privately held company that operates in the prepaid, gift card and payments industries. It supports solutions, technology, management and distribution of branded value such as gift cards, telecom and financial service products. Blackhawk's network reaches people through a number of different channels including in-store, online, mobile, and incentive. Blackhawk is headquartered in Pleasanton, California and was incorporated in 2006.[2]

Blackhawk Network Holdings, Inc.
Private
IndustryGift Cards, Prepaid, Payments, and Financial Services
Headquarters
Pleasanton, California
,
United States of America
Area served
Global
Key people
William Y. Tauscher (Executive Chairman)
Talbott Roche (CEO and President)
Joan Lockie (CFO)
Harel Kodesh (CTO)
OwnerSilver Lake Partners and P2 Capital Partners
Number of employees
3,190[1]
WebsiteBlackhawkNetwork.com

The company began by selling gift cards through Safeway stores in 2001 and then expanded to other partners in the United States. The Nordstrom gift card was one of the first items launched by the group. The company grew dramatically over the following years by expanding content, channels and markets through organic growth and acquisition. This included the acquisition of the German startup Retailo and the purchase of Parago Inc. for $290 million. In 2013, the company filed for a $200 million IPO on NASDAQ. In 2014, Safeway divested the rest of its Blackhawk Network shares to make Blackhawk a fully independent company.[3]

History

Blackhawk was formed in 2001 as a subsidiary of Safeway Inc., following the company's decision to diversify into other markets that weren't focused around grocery, in an attempt to grow its portfolio and turnover.[4] The subsidiary of Safeway began as a simple idea to sell gift cards in Safeway Inc. stores across the United States.[5]

The idea for the company came about after the group originally called Safeway Marketing Services and run by Donald Kingsborough came up with the concept of selling gift cards at Safeway stores while researching ways Safeway could grow its business, away from traditional grocery-related products. The idea was to launch gift cards during the holidays in 2001. At the time of launch, the gift card market was relatively small, but it began to grow quickly when Safeway Inc. customers began to become more interested in convenience.[5]

Over the next few years, Blackhawk used the successful gift card program in Safeway and other global retailers as a platform to partner with more merchants and today has over 700+ partners in 25 countries. Brands operating under Blackhawk included The Home Depot, Barnes & Noble and McDonald’s.[5] During this period, Blackhawk launched GiftCardMall.com, an online store where consumers could purchase gift cards.[5]

The company continued to grow its digital profile over the coming years, with a major acquisition in 2011. Cardpool was acquired for an unknown amount by Blackhawk. Cardpool purchases pre-owned gift cards and sells them at large discounts.[6] At the time of the purchase, it was decided that Cardpool would remain as a brand under the Blackhawk umbrella to further develop its gift card marketplace.[7] In August 2010, it was announced that Bill Tauscher would become the CEO of Blackhawk. Prior to this, he served as executive chairman from 2009 onwards.[8]

Blackhawk promoted Talbott Roche to become its president in 2010. Roche had been part of the company since it was founded in 2001. Prior to her becoming president, she was nominated for the Stevie Award Women in Business, and was also recognized by Progressive Grocer as a Top Woman in Grocery. Roche also won the prestigious Paybefore Industry Achievement Award and was named one of the Top 5 Most Interesting People in Prepaid by Paybefore News.[9]

It was announced in 2013 that Blackhawk would be filing its IPO and launching on the NASDAQ. The stock was floated at a total value of $200 million, following sales hitting $959 million for the previous financial year. Goldman Sachs, Bank of America, Merrill Lynch, Citi and Deutsche Bank were the joint bookrunners on the deal.[10][11] Blackhawk made another acquisition in 2013, buying the company InteliSpend. The acquisition was seen as an expansion in a similar market to gift cards, with InteliSpend providing corporate incentives and consumer promotion products. Around a similar period of time, the company also announced a partnership with PayPal to provide gift card services through PayPal's digital wallet.[12]

Following the IPO announcement, Blackhawk announced the purchase of the German-based startup, Retailo. The acquisition in late 2013 was estimated to be around $50 million. Retailo would remain in Germany, operating as a subsidiary of Blackhawk.[13] Blackhawk announced one of its most significant acquisitions in 2014 with the $290 million purchase of Parago Inc. The incentives and rewards solutions company would be a major step into incentives for Blackhawk and make up the majority of their incentives branch. Parago would provide expertise for Blackhawk in designing incentive programs, with Parago Inc. already designing reward-based incentive programs for companies including Dell, General Electric, and Toyota.[14]

Blackhawk's parent company, Safeway Inc., completed a spin-off of Blackhawk in April 2014. This was done by distributing 37.8 million shares of Blackhawk stock to Safeway shareholders.[15] Later that year, Blackhawk announced that they would be acquiring Dallas, Texas-based CardLab.[16]

In January 2015, Blackhawk launched Blackhawk Engagement Solutions. The division focuses on engagement, incentive and rebate programs.[17] Blackhawk Engagement Solutions was also formed to group together a number of incentive providers Blackhawk Network had acquired, including Incentec Solutions, Incentive CardLab, InteliSpend, and Parago.[14][18] Blackhawk also announced the acquisition of Achievers and Netherlands-based DIDIX Gifting & Promotions in 2015.[19][20]

In early 2016, it was announced that Talbott Roche would become the CEO while remaining in her current role as President. The move came after Blackhawk had experienced rapid growth over the previous five years, tripling its revenue.[21] Around the same time, Blackhawk also acquired the ecommerce company, NimbleCommerce.[22] A couple of months later, Blackhawk announced that they would be acquiring extrameasures. No terms of the deal were disclosed.[23]

Blackhawk announced in September 2016 that they would be acquiring Grass Roots Group Holdings Ltd., a provider of customer and employee engagement solutions.[24] According to Incentive magazine, the acquisition totaled $118 million.[25] Following the acquisition, Grass Roots confirmed they would operate as a subsidiary company of Blackhawk's, with operations in Europe and Asia-Pacific continuing as they did prior to the acquisition.[26][27]

On Aug. 30, 2017, Blackhawk announced the acquisition of Portland, Maine-based CashStar, which provides digital gift card solutions to major retailers and restaurants, for $175 million in cash.[28]

On Jan. 16, 2018, Blackhawk announced that it would be acquired by Silver Lake and P2 Capital Partners for $3.5 Billion.[29]

On April 8, 2020, Blackhawk acquired SVM Cards, a provider of gas station and retail branded gift cards in the gift and B2B spaces.[30][31]

Market

Blackhawk announced two major partnerships in 2015. The first was with Stockpile, to distribute gift cards on their behalf. The move was seen as innovative by the Palo Alto-based startup, as it allowed consumers to purchase a gift card that can be redeemed to open and fund an account with stock. By partnering with Blackhawk, Stockpile would sell their gift card products in retail stores already partnered with Blackhawk.[32] Blackhawk and Samsung announced a partnership deal later the same year to allow gift cards to be integrated into Samsung Pay. The deal meant 50 global retailers would now have their gift cards accessible in Samsung's mobile wallet.[33]

Startups have begun to partner with Blackhawk to provide their users with gift rewards. One example is with Jay S. Walker's Upside, where rewards are given to people that were flexible with their hotel and flight bookings. According to Fortune magazine, a business traveler might earn a gift card for staying at a hotel that is farther away from a convention center or taking a flight that leaves 30 minutes earlier.[34] In May 2016, Upside and Blackhawk announced a partnership to allow businesspeople to receive gift rewards through Blackhawk.[34]

Recognition

Blackhawk is the recipient of numerous awards, including the 2015 Paybefore Europe Awards Change Agent of the Year, which recognized Blackhawk’s global expansion efforts in mCommerce and gifting, as well as the 2015 Paybefore Best in Category for Top Digital Dollars award, which recognized Blackhawk’s Reloadit Safe, a product that facilitates the loading of cash on a reloadable prepaid card. Blackhawk was also named the 2014 Company of the Year by The Stevie International Business Awards and the American Business Awards. Talbott Roche, Blackhawk’s CEO and president, was selected as an Ernst & Young Entrepreneur of the Year finalist.[35]

In 2015, Blackhawk's female executives were recognized by Pay magazine and featured on the cover of its fall issue. The issue focused on Women Driving Payments Change.[36] The company was also recognized at the Pay Awards in the same year for its Gift Card for Stock, winning "Product of the Year."[37]

Talbott Roche was again recognized by PYMNTS, winning the Woman Innovating Technology Award in 2016.[38]

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References
  1. https://fortune.com/fortune500/2018/blackhawk-network-holdings/
  2. "Talbott Roche has the team and the strategy to help Blackhawk Network dominate". Smart Business. June 1, 2015.
  3. "Blackhawk becomes independent company". U.S. Securities and Exchange Commission.
  4. Kesmodel, David (December 3, 2007). "New Safeway Business Takes Root". The Wall Street Journal.
  5. "Executive Profile Series: One on One With Don Kingsborough (September 2007)". PayBefore. September 2007.
  6. Rao, Leena (October 21, 2011). "Blackhawk Network Buys Gift Card Marketplace Cardpool". TechCrunch.
  7. Taylor, Colleen (October 21, 2011). "Cardpool acquired by Safeway's gift card division". Gigaom.
  8. DeBonis, Loraine (June 2011). "Executive Profile: William Y. Tauscher, Chairman and CEO, Blackhawk Network". PayBefore.
  9. "Talbott Roche Appointed President of Blackhawk Network". Blackhawk Network. November 16, 2010.
  10. "Safeway's Blackhawk Network files for a $200 million IPO". NASDAQ. March 18, 2013.
  11. Rich, Gillian (March 18, 2013). "Safeway Files IPO For Blackhawk Gift Card Unit". Investors.com.
  12. Woodward, Kevin (October 23, 2013). "PayPal, InteliSpend Deals Broaden Blackhawk Network's Gift And Prepaid Card Reach". DigitalTransactions.net.
  13. Lomas, Natasha (December 3, 2013). "Blackhawk Network Picks Up Gift Card Startup, Retailo, For €50M To Bolster Its Reach In Europe". TechCrunch.
  14. "Parago Inc. to be acquired for $290M by Blackhawk Networks". Biz Journals. September 26, 2014.
  15. "Safeway Inc. Completes Spin-Off of Blackhawk Network Holdings, Inc". MarketWatch. April 14, 2014.
  16. "B2B PAYMENTSCardLab Acquired By Blackhawk". PYMNTS.com. September 16, 2014.
  17. Macinas, Melanie (January 30, 2015). "Blackhawk Network Launches Incentives Division". PaymentWeek.
  18. "Blackhawk Finding Ways To Grow In Gift Card Business". Investors.com.
  19. Detar, James (November 6, 2015). "Gift Card Seller Blackhawk Expands With Achievers Buy". Investors.com.
  20. "Blackhawk Nabs Dutch Gifting Provider in Latest Expansion Move". PayBefore. November 25, 2015.
  21. "Gift card seller Blackhawk Network names CEO". Biz Journals. February 23, 2016.
  22. "Blackhawk Network Buys NimbleCommerce". PYMNTS.com. February 5, 2016.
  23. Quintaro, Paul (March 31, 2016). "Blackhawk Network Reports Purchase of extrameasures, No Terms Disclosed".
  24. "Blackhawk Network to Acquire Grass Roots Group". CardFlash. September 6, 2016.
  25. Palmer, Alex (September 13, 2016). "Blackhawk Network to Acquire Grass Roots Group". Incentive magazine.
  26. "Grass Roots to be bought by Blackhawk Network". Recruiter magazine. September 7, 2016.
  27. "Blackhawk Continues Buying Spree with Grass Roots Purchase". Rewards + Recognition Marketplace.
  28. Richardson, Whit. "Portland's CashStar acquired for $175M - Maine Startups Insider". mainestartupsinsider.com. Retrieved 2017-09-01.
  29. "Blackhawk Network Holdings, Inc. to be Acquired by Silver Lake and P2 Capital Partners for $3.5 billion". Retrieved 2018-06-26.
  30. "Blackhawk Network Acquires SVM Cards". finance.yahoo.com. Retrieved 2020-04-09.
  31. "Blackhawk Network acquires SVM cards to expand B2B gift card offerings". business-newsupdate.com. 2020-04-09. Retrieved 2020-04-09.
  32. Sidel, Robin (October 13, 2015). "Are You Ready to Buy Stocks at Your Grocery Store?". The Wall Street Journal.
  33. "Samsung Pay Makes It Easy to Purchase, Store, Use and Share Gift Cards Directly from Your Phone". Samsung. December 10, 2015.
  34. Korosec, Kirsten (June 21, 2016). "Priceline Founder Launches New Company Aimed at Business Travelers". Fortune.
  35. "EY Entrepreneur Of The Year™ 2014 Northern California Awards". Smart Business. June 26, 2014.
  36. "Blackhawk's Female Execs Recognized by Pay Magazine". Blackhawk Network. October 15, 2015.
  37. "2016 Pay Awards Winners: Support Your Favorites". PayBefore. January 19, 2016.
  38. "Innovation Project 2016 Award Winners". PYMNTS.
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