Portland-based CashStar acquired for $175 million

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.