Blackhawk Network Acquires CashStar for $175 Million
Originally published by Paybefore on August 30, 2017.
Blackhawk Network Inc. keeps getting bigger. The Pleasanton, Calif.-based global technology company, has acquired digital gifting specialist CashStar Inc. for approximately $175 million in cash.
Blackhawk, which has been on an acquisition spree over the last several years, says the acquisition strengthens its position in the emerging digital gift card market, particularly in first-party gift cards.
CashStar’s Pay Award-winning commerce platform enables retailers to market, sell and distribute digital and plastic gift cards directly to consumers and businesses across a wide range of channels. Clients include brands like Sephora, Starbucks, The Home Depot, Uber and Walmart.
Digital gift cards are the fastest-growing segment of the massive $100 billion+ first-party gift card market, according to Mercator Advisory Group research. A 2016 Blackhawk study also found that while plastic still reigns supreme with 89 percent of consumers surveyed reporting they have purchased at least one plastic gift card in the previous 12 months, 71 percent of those individuals have also purchased one or more e-gifts during the same time frame.
“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,” she added. The company will continue to evaluate acquisition candidates as well as potential share repurchases.
CashStar becomes part of Blackhawk’s digital and incentives businesses. CEO and President Ben Kaplan continues to manage the business and reports directly to Blackhawk’s general manager of digital and incentives, David Jones.