Prepaid card distributor Blackhawk Network announcedtoday that it has agreed to buy incentive and rebate provider Parago Inc.in a deal valued at approximately $290 million.
Blackhawk Network, a leadingprepaid and payments network announced today a definitive agreement under whichBlackhawk will acquire all outstanding shares ofParago, Inc. for approximately $290 million. Paragois a leader in providing global incentive and engagement solutions that drivecustomer acquisition, employee retention and enable and engage channel salespartners. The acquisition will add significant capabilities to Blackhawk’s already extensive incentive solutionsbusiness.
The deal is an extension of Blackhawk’s strategy todiversify its business. The company has purchased the gift card exchangecompany Cardpool in 2011, and incentives company InteliSpend in 2013. TheInteliSpend was a notable deal because it gave Blackhawk access toInteliSpend’s intellectual property for restricted authorization networks, andthe company’s experience in running incentives programs. The Parago purchasewill further extend this line of business and give it the ability to offer amore well-rounded program to potential clients.
Blackhawk Network built a business as a unit of Safeway Inc.by setting up gift and prepaid card malls inside of grocery stores. (Safewayspun Blackhawk off in a public offering in April.) Recognizing that plasticcards increasingly need to share the stage with digital payments, Blackhawk hasbeen working to diversify its business. Mercator Advisory Group covered thisevolution in its research report: Embracinga Digital Future: Three Case Studies in Prepaid Card Distribution, and itestimated the size of the total card mall market in PrepaidCard Mall Volumes Continue to Grow in the U.S.
Overview by Ben Jackson, Director of Prepaid Advisory Service for Mercator Advisory Group
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