Blackhawk Network to Acquire InteliSpend Prepaid Solutions
Blackhawk Network announced that it has entered into a definitive agreement to acquire InteliSpend Prepaid SolutionsTM, a leader in the corporate incentives and consumer promotions marketplace. The transaction is expected to close no later than November 8, 2013 and is subject to customary closing conditions including regulatory approvals.
"Blackhawk has become one of the largest third party providers of prepaid cards and payment solutions to consumers through its network of content providers and points of retail distribution. The acquisition of InteliSpend gives us a very strong entry into the complementary corporate incentives and consumer promotions channels," said Bill Tauscher, Blackhawk Network CEO. "Together, we will be able to bring exciting new digital solutions into the corporate incentives industry in the U.S. and internationally, adding even more value for both InteliSpend's business customers and Blackhawk's content partners," he added.
InteliSpend, with a history of innovation, is one of the largest providers of prepaid open loop incentive products, bringing deep and broad customer relationships and a strong channel partner network as the foundation for Blackhawk's future growth in this space. The company pioneered Restricted Authorized Network (RAN) technology and developed its popular DirectSpendTM product that enables clients to fine-tune the effectiveness of their incentives programs by controlling merchant acceptance and directing consumer spend. InteliSpend is also known for its white glove service approach, earning excellent client satisfaction ratings.
"Blackhawk brings us digital and mobile technologies, well-established content partnerships and overall industry leadership that will expand our reach," said Jim Menadier, InteliSpend president. "We share a mission to deliver world-class program management, offer unrivaled services, provide industry-leading expertise and serve the incentives and promotions industries through innovative prepaid solutions."
InteliSpend will operate as a business unit of Blackhawk, reporting directly to Talbott Roche, Blackhawk Network president, and will remain headquartered in Fenton, MO.
Blackhawk is acquiring substantially all of the assets of the InteliSpend business for cash and plans to finance the purchase using cash on hand and borrowings from Safeway Inc., Blackhawk's parent company. The acquisition is not expected to have a material impact on Blackhawk's fourth quarter 2013 results. For fiscal 2014, it is expected to add approximately $50 to $60 million in Adjusted Operating Revenues and be earnings accretive. Closing conditions include expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Raymond James & Associates served as financial advisor to InteliSpend and its parent company, Maritz Holdings, Inc.
Conference Call Details
Blackhawk Network will host a conference call to discuss transaction details on October 22, 2013 at 6:00 a.m. PDT / 9:00 a.m. EDT. Hosting the call will be Bill Tauscher, CEO, Talbott Roche, president, and Jerry Ulrich, chief financial & administrative officer. A webcast of the call can be accessed via the Company's investor relations website at http://ir.blackhawknetwork.com/. In addition, Blackhawk will post a slide presentation relating to this transaction under "Presentations" on its investor relations website prior to the call. A webcast replay will be available on Company's investor relations website until October 29.
About Blackhawk Network
Blackhawk Network Holdings, Inc. (Nasdaq: HAWK) is a leading prepaid payment network which supports the distribution of gift cards, prepaid telecom products and financial service products across a global network. Blackhawk's digital platform supports prepaid across a network of digital distribution partners including etailers, financial service providers and mobile wallets. For more information please visit www.blackhawknetwork.com.
InteliSpend delivers intelligent prepaid solutions for business needs: employee rewards, wellness, sales incentives, expense management and promotional programs. InteliSpend's prepaid card expertise, innovative approach and patented DirectSpend® process can solve even the most complex challenges. Relationships with American Express, Discover®, MasterCard and Visa enable the ideal alignment of network and need. Learn more about using InteliSpend's evolved currency at www.intelispend.com.
Forward Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements relate to, among other things, the anticipated closing date and benefits of the acquisition, Blackhawk's plans for financing the acquisition and expectations regarding the impact of the acquisition on Blackhawk's financial statements, Adjusted Operating Revenues and earnings. Forward-looking statements are indicated by words or phrases such as "guidance," "believes," "expects," "anticipates," "estimates," "plans," "continuing," "ongoing," and similar words or phrases and the negative of such words and phrases. Forward-looking statements are based on our current plans and expectations and involve risks and uncertainties which are, in many instances, beyond our control, and which could cause actual results to differ materially from those included in or contemplated or implied by the forward-looking statements. Such risks and uncertainties include the following: the risk that the acquisition may not close; our ability to integrate InteliSpend into our company and to realize the potential benefits of the acquisition; our ability to grow at historic rates or at all; the consequences should we lose one or more of our top distribution partners or fail to attract new distribution partners to our network or if the financial performance of our distribution partners' businesses decline; our reliance on our content providers, the demand for their products and our exclusivity arrangements with them; our reliance on relationships with card issuing banks; the consequences to our future growth if our distribution partners fail to actively and effectively promote our products and services; the requirement that we comply with applicable laws and regulations, including increasingly stringent money-laundering rules and regulations; risks related to our ongoing relationship with Safeway; and other risks and uncertainties described in our reports and filings with the Securities and Exchange Commission, including the registration statement filed in connection with our initial public offering and our subsequent Quarterly Reports on Form 10-Q. We undertake no obligation to update forward-looking statements to reflect developments or information obtained after the date hereof and disclaim any obligation to do so other than as may be required by law.
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