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Blackhawk Network Holdings, the gift card unit of Safeway Inc., said yesterday that it has filed for an initial public offering (IPO) that could raise as much as $200 million for the company.

Blackhawk manufactures and distributes the retail gift, debit and telephone cards sold in many of the nation's stores; it also runs the payment and gift card infrastructures for Safeway and other retailers.

Reuters reports that "Safeway currently owns about 96 percent of Blackhawk and will continue to hold a significant stake in the unit after the IPO, according to the filing ... The company, founded in 2001 as a division of Safeway, reported adjusted net income of $50.3 million on revenue of $949 million in 2012."
KC's View:
The creation of Blackhawk is one of the smartest moves made by Safeway since the beginning of the century ... though it always has amazed me the degree to which Safeway's competitors have been willing to do business with it, essentially lining its pockets with profits that it could use to be more competitive elsewhere.

Still, Safeway's Blackhawk initiative has to be admired.