PLEASANTON, Calif.,
Aug. 30, 2017 /PRNewswire/
-- Blackhawk Network, Inc., a global financial technology
company ("Blackhawk"), announced
today that it has acquired CashStar, Inc., a leading provider of
gift card commerce solutions at the forefront of mobile payments
and digital gifting innovation. The acquisition strengthens
Blackhawk's position in the
emerging digital gift card market and establishes Blackhawk as a leading provider in the fast
growing first-party digital gift card market. The first-party gift
card market transaction dollar volume is estimated in excess of
$100 billion with digital being the
fastest-growing segment of that market.
CashStar's commerce platform enables retailers to market, sell
and distribute digital and plastic gift cards in the first-party
digital card business, which is directly to consumers and
businesses across a wide range of channels. With CashStar's
flexible platform, merchants can use digital and physical gift
cards to engage consumers throughout the customer lifecycle,
including marketing and promotions, sales and customer service.
CashStar increases Blackhawk's
offerings and deepens merchant relationships, while extending
Blackhawk's strength in the
third-party and incentives businesses to the large first-party
market. In addition, the acquisition provides retailers and
distributors with more powerful options in mobile and digital
distribution—two of the fastest-growing gift card segments in the
industry today.
"The acquisition strategically enhances Blackhawk's ability to provide the right
digital solutions to our partners to meet the changing needs of
business customers and consumers," said Talbott Roche, CEO and president of Blackhawk
Network. "With the addition of CashStar, Blackhawk is now a leading provider in the
fast growing first-party digital market. Also, with CashStar
margins projected in the range of 25 percent to 30 percent for
fiscal 2018, Blackhawk maintains
its focus on margin expansion. Finally, Blackhawk remains committed to optimizing
capital allocation to enhance shareholder returns and will continue
to evaluate acquisition candidates as well as potential share
repurchases in the future."
"Joining forces with Blackhawk
will help us deliver even more powerful capabilities and new
revenue opportunities for our clients and partners," said
Ben Kaplan, CEO and president of
CashStar. "Together, we can provide merchants with unified
end-to-end solutions for B2B and B2C gift card distribution. The
combination of our platform and Blackhawk's product breadth and global reach
creates innovative new applications for branded value and mobile
payments. We couldn't be more excited."
CashStar becomes part of Blackhawk's digital and incentives businesses.
Kaplan continues to manage the business and reports directly to
Blackhawk's General Manager of
Digital and Incentives, David
Jones.
"We're looking forward to leveraging the synergies across our
businesses and technologies to offer comprehensive gift card
solutions for a brand to sell directly to consumers or businesses
through digital channels," said Jones. "We are committed to
maintaining CashStar's merchant-centric culture that has earned the
company so much success to-date. As we integrate their SaaS
platforms and organization into Blackhawk, we will provide the same
exceptional service and partnership that Blackhawk and CashStar customers have come to
expect."
Transaction Details
Blackhawk acquired CashStar for approximately
$175 million in cash. "We expect the
acquisition to be at least earnings neutral in fiscal 2017 and
meaningfully accretive after synergies in 2018, adding $12 million to $15 million in adjusted EBITDA,
$3 million to $5 million in adjusted
net income and $0.05 to $0.09 in
adjusted EPS," said Jerry Ulrich,
Blackhawk's chief financial and
administrative officer. "In addition, it is projected to generate
positive cash flow in 2018 and helps us gain leverage in our
digital products category by accelerating topline growth. With
projected 2018 Adjusted EBITDA margins above our corporate average,
it's also consistent with our margin expansion objectives. We
completed the acquisition using a combination of available cash and
borrowings under our revolving credit facility while maintaining
further borrowing capacity with a projected pro forma debt to
EBITDA leverage ratio of approximately 3.8 at the end of our fiscal
third quarter."
Conference Call/Webcast Details
Blackhawk will host a conference call and
webcast to discuss transaction details on August 31, 2017 at 1 p.m.
PDT/4 p.m. EDT. Hosting the
call will be Blackhawk CEO and President, Talbott Roche; Executive Chairman, Bill Tauscher; and Chief Financial and
Administrative Officer, Jerry
Ulrich. Participants can access the webcast by visiting the
Company's Investor Relations website at ir.blackhawknetwork.com. In
addition, Blackhawk will post a
slide presentation relating to this transaction under the
"Presentations" page of its Investor Relations website prior to the
call. A replay of the webcast will be available on the Company's
investor relations website until Friday,
September 29, 2017.
About Blackhawk Network
Blackhawk Network Holdings,
Inc. (NASDAQ: HAWK) is a global financial technology company and a
leader in connecting brands and people through branded value
solutions. Blackhawk platforms and
solutions enable the management of stored value products,
promotions and incentive programs in retail, ecommerce, financial
services and mobile wallets. Blackhawk's Hawk Commerce division offers
technology solutions to businesses and direct to consumers. The
Hawk Incentives division offers enterprise, SMB and reseller
partners an array of platforms and branded value products to incent
and reward consumers, employees and sales channels. Headquartered
in Pleasanton, Calif.,
Blackhawk operates in 26
countries. For more information, please visit blackhawknetwork.com,
hawkcommerce.com, hawkincentives.com or our product websites
giftcards.com, giftcardmall.com, cardpool.com, giftcardlab.com and
omnicard.com.
About CashStar
CashStar is an industry-leading
provider of gift card commerce solutions at the forefront of mobile
payments and digital gifting. The CashStar Commerce platform is
used by merchants to increase revenue, reduce costs and optimize
customer experiences across channels, and the CashStar Exchange
platform is used by gift card distributors and loyalty programs to
procure and deliver gift cards from hundreds of leading brands.
CashStar clients include top brands like Sephora, Starbucks, The
Home Depot, Uber and Walmart and distribution partners such as
American Express Membership Rewards, Great Lakes Scrip, Maritz
Motivation Solutions, MyCokeRewards, Raise.com and United
MileagePlus X. To learn more about CashStar's solutions, please
visit www.CashStar.com, follow @CashStar or
email info@CashStar.com.
Forward-Looking Statements
This press release contains 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. Forward-looking
statements are indicated by words or phrases such as "guidance,"
"believes," "expects," "intends," "forecasts," "can," "could,"
"may," "anticipates," "estimates," "plans," "projects," "seeks,"
"should," "targets," "will," "would," "outlook," "continuing,"
"ongoing," and similar words or phrases and the negative of such
words and phrases. Forward-looking statements are based on
Blackhawk's current plans and
expectations and involve risks and uncertainties which are, in many
instances, beyond its 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, without limitation, Blackhawk's ability to successfully integrate
the acquired business and solutions; costs related to the
acquisition and integration of the acquired business; the
competitive environment in the industry and competitive response to
the acquisition; general market and business conditions; and the
accounting impact of the acquisition. Other factors that could
cause or contribute to such differences include, but are not
limited to, those described in Blackhawk's reports and filings with the
Securities and Exchange Commission (the "SEC"), including the risks
and uncertainties set forth in Item 1A under the heading "Risk
Factors" in its Annual Report on Form 10-K for the year ended
December 31, 2016 and other
subsequent periodic reports it files with the SEC. Furthermore,
such forward-looking statements speak only as of the date of this
press release. Blackhawk
undertakes 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.
INVESTORS/ANALYSTS:
Patrick
Cronin
(925) 226-9973
investor.relations@bhnetwork.com
MEDIA:
Blackhawk Network
Courtney Brunkow
(303) 717-9575
courtney@fletchergroupllc.com
CashStar, Inc.
Kini Schoop
(917) 415-6508
kschoop@cashstar.com
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SOURCE Blackhawk Network Holdings, Inc.