Research Update: Blackhawk Network Holdings, Inc. Assigned 'B' Rating On Acquisition; Outlook Stable

Silver Lake Partners and P2 Capital Partners have entered into a definitive agreement to acquire Blackhawk Network Holdings, Inc. for a total consideration of approximately $3.5 billion. Blackhawk Network and the sponsors will fund the transaction with a $400 million senior secured first-lien revolving credit facility, a $1,350 million first-lien senior secured term loan, and a $400 million second-lien senior secured term loan. We expect the revolver to be undrawn at transaction close. We are assigning our 'B' corporate credit rating to Blackhawk Network. In addition, we are assigning a 'B' issue-level rating and '3' recovery rating to the first-lien senior secured credit facilities, and a 'CCC+' issue-level rating and '6' recovery rating to the second-lien senior secured credit facility.

...+ Silver Lake Partners and P2 Capital Partners have entered into a definitive agreement to acquire Blackhawk Network Holdings, Inc. for a total consideration of approximately $3.5 billion. + Blackhawk Network and the sponsors will fund the transaction with a $400 million senior secured first-lien revolving credit facility, a $1,350 million first-lien senior secured term loan, and a $400 million second-lien senior secured term loan. We expect the revolver to be undrawn at transaction close. + We are assigning our 'B' corporate credit rating to Blackhawk Network. + In addition, we are assigning a 'B' issue-level rating and '3' recovery rating to the first-lien senior secured credit facilities, and a '###+' issue-level rating and '6' recovery rating to the second-lien senior secured credit facility. + The stable outlook reflects our expectation for Blackhawk to continue to grow despite secular headwinds in the broader U.S. retail sector, execute on its planned cost savings, and reduce leverage...

Research Update