VC firm to buy Blackhawk Network

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Gift card giant Blackhawk Network will be acquired by the tech investment firm Silver Lake, along with P2 Capital Partners, for $3.5 billion in a move underscoring investor interest in the shift to mobile digital technology, where Blackhawk devoted millions in recent years.

Menlo Park, Calif.-based Silver Lake will acquire Pleasanton, Calif.-based Blackhawk in an all-cash transaction set to close during the middle of this year, and afterward Blackhawk will operate as a private company, retaining its existing management team, Blackhawk said in a Tuesday press release.

“Blackhawk’s outstanding network of partners and proprietary technology create a unique franchise in the payments industry with a proven ability to innovate in both the physical and digital segments,” said Mike Bingle, managing partner at Silver Lake, in the release.

“Silver Lake and P2 Capital Partners bring 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,” added Talbott Roche, Blackhawk’s CEO and president, in the release.

Last year Blackhawk acquired digital gift card specialist CashStar for $175 million and separately partnered with Mastercard so consumers could load Mastercard-branded prepaid and incentive or gift cards to third-party mobile wallets like Apple Pay, Android Pay and Samsung Pay.

One day before announcing the Silver Lake deal, Blackhawk Network unveiled a partnership with Ant Financial enabling users of the Alipay wallet to access U.S.-branded gift cards.

Blackhawk's deal with Alipay leverages QR code technology, enabling instant issuance of branded stored-value e-gift card from its participating retailers within the Alipay wallet to Chinese consumers traveling within the U.S., according to a Monday press release.

“We partnered with Blackhawk for its robust network of top-tier retailer partners, its innovative solutions and proprietary technology, and we are pleased to continue to provide Chinese travelers with a seamless shopping and payment experience in North America,” said Souheil Badran, president of Alipay Americas, in the release.

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