Safeway 2013 Annual Report Download - page 60
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Table of Contents
Initial Public Offering of Blackhawk On April 24, 2013, Blackhawk, a Safeway subsidiary, completed its initial public offering of 11.5
million shares of its Class A common stock at $23.00 per share on the NASDAQ Global Select Market, which included the exercise by the
underwriters for the offering of an option to purchase 1.5 million shares of Class A common stock. The offering consisted solely of shares
offered by existing stockholders, including Safeway. As part of the IPO, Safeway sold 11.3 million shares of Class A common stock of
Blackhawk for proceeds of $243.6 million ($238.0 million, net of professional service fees), reducing the Company's ownership from
approximately 95% to approximately 73% of Blackhawk's total outstanding shares of common stock. Safeway recorded these net proceeds
as an increase to Additional Paid-In Capital and used these net proceeds to reduce debt. Additionally, the Company recorded a $76.5 million
tax liability on the sale of these shares as a reduction to Additional Paid-In Capital and $5.8 million as an increase to tax expense. The taxes
were paid in the fourth quarter of 2013. Additionally, Safeway incurred a $17.9 million deferred tax expense related to the retained shares in
Blackhawk.
As of December 28, 2013, Safeway owned 37.8 million shares, or approximately 72.2%, of Blackhawk, which the Company plans to
distribute to its stockholders. See Note U.
Acquisitions On November 29, 2013, Blackhawk acquired 100% of the outstanding common stock of Retailo, a German privately-held
company which is a third-party gift card distribution network in Germany, Austria and Switzerland. Blackhawk acquired Retailo for total
purchase consideration of $70.2 million. The following table summarizes the purchase price allocation which was based upon the estimated
fair value of each asset and liability (in millions).
Settlement receivables $18.1
Settlement payables (14.8)
Other liabilities, net (0.7)
Deferred income taxes, net (7.4)
Identifiable technology and intangible assets 45.7
Noncontrolling interests (6.9)
Goodwill (1) 36.2
Total consideration
$70.2
(1) See Note D.
Noncontrolling interests result from third-party ownership interests in certain subsidiaries of Retailo.
The following table summarizes the components of the identifiable technology and intangible assets of Retailo and their estimated useful
lives at the acquisition date (dollars in millions).
Fair Value
Useful life
Distribution partner relationships $38.0
15 years
Customer relationships 5.5
8 years -10 years
Technology 1.9
3 years
Trade name 0.3
3 years
$45.7
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