Blackhawk Network To Buy Parago For About $290 Mln

(RTTNews) - Blackhawk Network Holdings Inc. (HAWK, HAWKB), a provider of prepaid products and payment services, said Thursday that it has agreed to acquire Parago, Inc. for about $290 million in cash.

Parago is a provider of global incentive and engagement solutions that drive customer acquisition, employee retention and engage channel sales partners. Blackhawk noted that acquisition of Parago will add significant capabilities to its incentive solutions business.

Commenting on the acquisition, Bill Tauscher, chief executive officer of Blackhawk Network said, "Blackhawk has continued to grow its business solutions in the prepaid payment industry around the world. Adding Parago into our portfolio is a significant step forward for Blackhawk's expansion plans in the large but fragmented incentives market."

Parago provides end-to-end engagement management programs for consumers, sales channels and employees. The company's client roster includes more than 250 customers, including Fortune 100 companies.

Blackhawk expects the transaction to close by October 31, 2014. Following the closing, Parago will operate as a subsidiary of Blackhawk and remain headquartered in Dallas, Texas.

Juli Spottiswood, President and CEO of Parago, will lead Blackhawk's incentive business and report to Talbott Roche, Blackhawk Network's president.

Pleasanton, California-based Blackhawk plans to finance the purchase using cash on hand and about $200 million in new borrowings under an expansion of its current credit facility.

The company expects the acquisition will be "meaningfully accretive" in 2015, adding $24 million to $28 million in adjusted EBITDA, and $8 million to $10 million in adjusted net income.

HAWK closed Wednesday's trading at $27.85. In Thursday's pre-market activity, the stock is up $1.85 or 6.64 percent to $29.70.