Portland-based CashStar Inc. has been acquired by a publicly traded financial technology firm for $175 million.
Blackhawk Network Holdings Inc. of Pleasanton, California, paid cash for the Maine company, which provides digital gift card services to retailers. Blackhawk’s website said it focuses on developing “new ways businesses can engage in and maximize rewarding relationships with their customers and employees.”
CashStar has been a privately held company since it was founded in Portland in 2008. It will be folded into Blackhawk, which trades on the Nasdaq exchange under the symbol HAWK. Blackhawk’s market capitalization, the total value of its shares, is roughly $2.5 billion.
CashStar CEO Ben Kaplan said the company will retain the CashStar name for the immediate future, but that it could be rebranded at some point. He said CashStar will remain in its current offices in Maine and Massachusetts and become part of Blackhawk’s digital and incentives businesses. Kaplan will continue to lead the business as a group vice president of Blackhawk.
CashStar was an early pioneer in digital gifting and has grown to be a leading provider of gift card e-commerce services. Its client roster consists of more than 300 major brands, including Sephora, Starbucks, Gap, The Home Depot, Uber and Wal-Mart. The company has 175 employees, 150 of whom work in Portland, and is part of a payment processing cluster in the region that includes Wex, PowerPay and Blue Tarp Financial.
Kaplan said CashStar was on its way to becoming a publicly traded company through an eventual initial public offering, which would have made it one of just a handful of public companies based in Maine. However, he said Blackhawk’s offer to buy the company instead provided some distinct advantages for shareholders, employees and customers.
First and foremost is that Blackhawk’s infrastructure and technology are complementary to CashStar’s, he said, which will allow the two enterprises to blend smoothly while saving money.
“There are a range of investments that CashStar was making … that this will allow us to no longer have to make,” Kaplan said. “CashStar gets to leverage all those existing investments by Blackhawk.”
The acquisition will benefit Blackhawk, as well, according to its president and CEO, Talbott Roche. She said the addition of CashStar will increase Blackhawk’s offerings and deepen its merchant relationships. In addition, the acquisition will provide retailers and distributors with “more powerful options” in mobile and digital distribution – two of the fastest-growing gift card segments in the industry.
“The acquisition strategically enhances Blackhawk’s ability to provide the right digital solutions to our partners to meet the changing needs of business customers and consumers,” Roche said in a statement. “With the addition of CashStar, Blackhawk is now a leading provider in the fast growing first-party digital market.”
Kaplan said CashStar employees are likely to experience only minor changes as a result of the acquisition. He indicated that CashStar will remain a Maine company at heart.
“We’re very proud of our heritage, too, and our connection to Maine,” he said.
J. Craig Anderson can be contacted at 791-6390 or at:
Twitter: @jcraiganderson
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