Shortly after news broke
that Pleasanton, CA-based Blackhawk Network would acquire Parago, Inc. for approximately $290 million on Sept. 25, IncentiveMag.com spoke with Blackhawk Network Chief Marketing Officer Teri Llach to ask her about Blackhawk's motivation for purchasing Parago.Incentive
: Why purchase Parago?
Llach: We purchased Intelispend a year ago from Maritz. They're a company that is very well positioned in the corporate incentive space and they do an amazing job of generating programs in the prepaid products space as they want to incent their employees. Then we purchased CardLab, an ecommerce specialist recently, too. we felt that we also wanted to be a leader in the prepaid incentive space that is also related to consumers. Parago fit the bill; they help motivate consumer actions. The combination of all of these components gives us a chance to be strong leader in the incentive business just like we are in the retail business.Incentive
: How long were you eyeing Parago? What are the key benefits of purchasing a company like Parago?
Llach: I can't really talk about that but I can tell you that Blackhawk has been in the prepaid business for many years. I've been with Blackhawk for 13 years, back when we were still a part of Safeway. Blackhawk went public about a year and a half ago in April 2013 and we've been a leader in the retail space. We knew that we wanted to continue to focus on delivering solutions in the consumer prepaid space, and we also realized we could do that in the incentive prepaid market. Our partnerships in retail are very important. And picking up these companies that already have a foothold in corporate and consumer incentives lets us jump into that category quickly because of all the synergies that we have. Acquisitions were the right direction for us to take on that.Incentive
: What's next for Blackhawk?
Llach: Blackhawk has always been known in the retail prepaid market--we're a pioneer in third-party retail prepaid. That third party market was really pioneered by Blackhawk. We will continue to be a leader in that space, not just on the physical side but also digital. We have partnerships with Amazon and Google, for example. Now we can support all of our partnerships and technologies, and do that in the incentive space and can utilize the tremendous leadership that we have in those companies that have been acquired. We can leverage their technologies and partnerships with ours. You can expect to see a lot more prepaid, both physical and digital in incentive marketing.
It's been fascinating to watch things change and see how consumers change. Consumers adopt and demand prepaid in so many ways as gifts. It's one of the No. 1 requested gifts for the holidays for the last several years. Some consumers thinks a gift card is more personal than a sweater they might not like. Consumers are adopting this product in many ways. This is starting to happen in incentives, too. They want a gift card to treat themselves. If we expand that in incentives, along with digital products and gifting, you'll see a lot more happy employees and customers who can treat themselves by using these products.