by Deanna Ting | March 26, 2013
Pleasanton, CA-based Blackhawk Network Holdings, a majority-owned subsidiary of Safeway and a provider of prepaid retail and restaurant gift cards, has filed for an initial public offering of as much as $200 million earlier this month. 

According to a filing with the U.S. Securities and Exchange Commission, the stock will be sold by existing investors, including Safeway. At the time of filing, the company did not disclose how many shares it will offer or at what price. Goldman Sachs & Co, Bank of America, Merrill Lynch, Citigroup, and Deutsche Bank Securities were listed as lead underwriters for the offering.

Blackhawk sells gift cards that can be redeemed at restaurants, retail, and grocery stores in the U.S., Canada, Europe, Mexico, and Australia, as well as online retailers. It also has digital-wallet services. Safeway earns commissions from Blackhawk card sales. Its business solutions include reward and incentive programs.

Safeway, the second-largest U.S. grocery chain, is selling its minority stake in Blackhawk at a time when U.S. consumer spending on prepaid gift cards expected to reach $274.7 billion in 2016, increasing by 48 percent from 2011, according to the Nilson Report, an industry newsletter. Blackhawk was founded in 2001 as a division of Safeway and last year it reported an adjusted net income of $50.3 million from a total revenue of $949 million in 2012.

Industry experts believe that Safeway’s latest move toward an IPO for Blackhawk is aimed at competing with big-box discount retailers such as Wal-Mart and Target. 

In related news, Blackhawk is also expanding by opening a new 130-seat, 15,000-square-foot business support facility in Reno, NV, earlier this month. The center will house three separate divisions of the company. Blackhawk, which has a workforce of more than 700 employees, plans to add 200 new jobs globally in 2013.