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Blackhawk Network Acquired by Silver Lake, P2 Capital Partners in $3.5 Billion Deal

Blackhawk Network has agreed to be acquired by Silver Lake and P2 Capital Partners in a deal worth $3.5 billion. The news comes just one day after the company announced a partnership with China-based digital payment platform Alipay that will enable Blackhawk Network retailers to better serve Chinese visitors to the U.S.

Talbott Roche, Blackhawk CEO and President, said the deal will bring “immediate benefits and significant value to our stockholders.” According to the terms of the acquisition, Blackhawk shareholders will receive $45.25 per share in cash, a premium of more than 29% above the average closing share value over the past three months of $36.50.

“Silver Lake and P2 Capital Partners brings the long-term focus, financial resources and technology expertise that can enable us to accelerate growth initiatives globally and reach the company’s full potential,” Roche said.

The acquisition is expected to close in mid-2018. Managing Partner at Silver Lake Mike Bingle praised Blackhawk’s “outstanding network of partners and proprietary technology” and the company’s “proven ability to innovate in both the physical and digital segments.” P2 Capital Partners’ Alex Silver pointed to his firm’s multi-year investment in and support of Blackhawk, saying “we look forward to working with Silver Lake and Blackhawk management to drive the company’s next stage of growth.”

That growth will include a new relationship with Alipay. Blackhawk announced on Monday that it is expanding Alipay’s mobile payment acceptance and engagement solutions to participating U.S. retailers. The service, which is slated to begin this month, will enable Blackhawk’s network of retailers to use the company’s technology to serve visiting Chinese consumers in the U.S.

“Until now, Chinese tourists lacked convenient access to information on what payment methods were accepted at U.S. retailers they wished to visit,” Roche explained. “Alipay is ubiquitous in China, and represents an effective way for retailers to engage with Chinese travelers.” Souheil Badran, president of Alipay Americas, pointed out that 4 million Chinese tourists visit North America each year. “Many of those travelers are Alipay consumers already and are looking for the payment safety, convenience, and efficiency they are accustomed to at home,” Badran said.

Blackhawk’s solution uses in-store QR codes to access its platform, which then instantly issues the retailer’s branded, stored-value egift. As well as mobile and online payments and money transfers, consumers using Alipay will be able to use the Blackhawk app to get local recommendations, find promotions, book a hotel room, buy movie tickets, and more – all directly from the app.

Partnerships have been a significant part of Blackhawk’s strategy in 2017. In November, the company expanded its relationship with eBay to provide B2B gift card services. The same month, Blackhawk renewed its long-term agreement with Kroger to continue providing both in-store an digital gift card services.

The company made news on both the product and personnel fronts this fall, as well. Blackhawk Network’s Hawk Incentives division launched its wallet-enabled prepaid card for promotions and incentives in September. In October, the company added former healthcare technology executive Charles O. Garner as Chief Financial Officer.

Headquartered in Pleasanton, California and with operations in 26 countries, Blackhawk Network acquired fellow Finovate alum CashStar last year, in a deal worth $175 million. At FinovateFall 2012, Blackhawk demonstrated its GoWallet technology that enabled consumers to manage all of their prepaid cards in one location.