The gift card and payment service unit of Safeway Inc, Blackhawk Network Holdings Inc, has filed with federal regulators an application for an IPO of Class A common stock amounting to US$200 million. This was in accordance with a previous announcement by the second largest US grocery retailer to take Blackhawk public by the first half of 2013.
The Safeway subsidiary sells prepaid gifts, debit and telephone cards in its retail outlets throughout the country located in supermarkets, pharmacies and convenience stores. Blackhawk also runs the payment and gift card infrastructure system for Safeway and other retailers. 96% of Blackhawk is owned by Safeway and even with the IPO, the retailer would still retain a significant stake in the unit.
Safeway attributes its growth in the last few quarters to the growth of its Property Development Centers real estate unit and Blackhawk's resurgence. It is expecting profits above estimates by Wall Street, with the last two months being driven up to record highs for the past two years or 38% overall for this year alone.
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