UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant  o

Check the appropriate box:

Payment of Filing Fee (Check the appropriate box):

PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION, DATED FEBRUARY 16, 2018

[            ]

Dear Fellow Stockholders:

You are cordially invited to attend a special meeting of the stockholders of Blackhawk Network Holdings, Inc., which we will hold at [         ], on [         ], at [         ] a.m. local time.

At the special meeting, our stockholders will be asked to consider and vote on a proposal to adopt the Agreement and Plan of Merger that we entered into on January 15, 2018, which we refer to as the “merger agreement,” providing for the acquisition of Blackhawk Network Holdings, Inc. by BHN Holdings, Inc. in a transaction that we refer to as the “merger.” If the merger agreement is adopted and the merger is completed, each share of our common stock (other than certain shares specified in the merger agreement) will be converted into the right to receive $45.25 per share in cash, without interest and subject to required withholding taxes, representing a premium of approximately 29.3% over the average closing share price of our common stock for the 90 calendar days ended January 12, 2018.

The Blackhawk Network Holdings, Inc. board of directors unanimously recommends that our stockholders vote “FOR” the proposal to adopt the merger agreement and “FOR” the other matters to be considered at the special meeting.

The enclosed proxy statement describes the merger agreement, the merger and related matters, and attaches a copy of the merger agreement. We urge stockholders to read the entire proxy statement carefully, as it sets forth the details of the merger agreement and other important information related to the merger.

Your vote is very important. The merger cannot be completed unless a majority of the outstanding shares of our common stock entitled to vote at the special meeting vote in favor of the proposal to adopt the merger agreement. If you fail to vote in person or by proxy, or fail to instruct your broker on how to vote, it will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

On behalf of the entire board of directors, I want to thank you for your continued support.

Neither the U.S. Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger, the merger agreement or the other transactions contemplated thereby or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

This proxy statement is dated [            ] and is first being mailed to stockholders on or about [            ].

BLACKHAWK NETWORK HOLDINGS, INC.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

Meeting Agenda:

To consider and vote upon the following proposals:

The Company board of directors has unanimously determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are fair to, and in the best interests of, the Company and its stockholders (other than Parent, Merger Sub and any of Parent’s other direct or indirect wholly owned subsidiaries), and unanimously approved and declared advisable the merger agreement, the merger and the other transactions contemplated by the merger agreement. The Company board of directors unanimously recommends that the stockholders of the Company vote (1) “FOR” the proposal to adopt the merger agreement, (2) “FOR” the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger, and (3) “FOR” the proposal to approve the adjournment of the special meeting, if necessary or appropriate, including to solicit additional proxies or in the absence of a quorum. If you sign, date and return your proxy card without indicating how you wish to vote on a proposal, your proxy will be voted “FOR” each of the foregoing proposals in accordance with the recommendation of the Company board of directors.

Your vote is important, regardless of the number of shares of common stock you own. The adoption of the merger agreement requires the affirmative vote of a majority of the outstanding shares of common stock entitled to vote at the special meeting and is a condition to the completion of the merger. The approval of the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and the approval of the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies or in the absence of a quorum, each requires the affirmative vote of the holders of a majority in voting power of the shares of common stock present in person or by proxy at the special meeting and entitled to vote thereon, but approval of these two proposals is not a condition to the completion of the merger. If you fail to vote in person or by proxy, or fail to instruct your broker, bank or other nominee on how to vote, the shares of common stock that you own will not be counted for purposes of determining whether a quorum is present at the special meeting, and will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

Under Delaware law, stockholders who do not vote in favor of the proposal to adopt the merger agreement will have the right to seek appraisal of the fair value of their shares of the Company as determined by the Delaware Court of Chancery if the merger is completed, but only if they submit a written demand for an appraisal before the vote on the proposal to adopt the merger agreement and comply with the other Delaware law procedures explained in the accompanying proxy statement. See the section of this proxy statement entitled “Appraisal Rights.”

You may revoke your proxy at any time before the vote at the special meeting by following the procedures outlined in the accompanying proxy statement.

Only holders of record of Company common stock as of the close of business on [         ], the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting.

Before voting your shares, we urge you to, and you should, read the entire proxy statement carefully, including its annexes and the documents incorporated by reference in the proxy statement. If you have any questions or need assistance in submitting a proxy or your voting instructions, please call our proxy solicitor, [         ], toll-free at [            ].

TABLE OF CONTENTS

SUMMARY

This summary highlights selected information contained in this proxy statement, including with respect to the merger agreement and the merger. We encourage you to, and you should, read carefully this entire proxy statement, its annexes and the documents referred to or incorporated by reference in this proxy statement, as this summary may not contain all of the information that may be important to you in determining how to vote. We have included page references to direct you to a more complete description of the topics presented in this summary. You may obtain the information incorporated by reference into this proxy statement without charge by following the instructions under the section of this proxy statement entitled “Where You Can Find Additional Information.”

The Companies (page 22)

Blackhawk Network Holdings, Inc.

Blackhawk Network Holdings, Inc., referred to as “Blackhawk,” the “Company,” “we,” “our” or “us,” is a Delaware corporation. Blackhawk (NASDAQ: HAWK) is a global financial technology company and a leader in connecting brands and people through branded value solutions. Blackhawk platforms and solutions enable the management of branded value products, promotions and rewards programs in retail, ecommerce, financial services and mobile wallets. Blackhawk’s Hawk Commerce division offers technology solutions to businesses and direct to consumers. The Hawk Incentives division offers enterprise, SMB and reseller partners an array of platforms and branded value products to incent and reward consumers, employees and sales channels. Headquartered in Pleasanton, California, Blackhawk operates in 26 countries.

Additional information about Blackhawk is contained in its public filings, which are incorporated by reference herein. See the sections of this proxy statement entitled “Where You Can Find Additional Information” and “The Companies — Blackhawk Network Holdings, Inc.”

BHN Holdings, Inc., BHN Intermediate Holdings, Inc. and BHN Merger Sub, Inc.

BHN Holdings, Inc., referred to as “Parent,” is a newly formed Delaware corporation. BHN Intermediate Holdings, Inc., referred to as “Intermediate,” is a newly formed Delaware corporation and a wholly owned subsidiary of Parent. BHN Merger Sub, Inc., referred to as “Merger Sub,” is a newly formed Delaware corporation and a wholly owned subsidiary of Intermediate. Each of Parent, Intermediate and Merger Sub is an affiliate of the limited partnership referred to in this proxy as “SLP Equity Investor” and was formed solely for the purpose of entering into the merger agreement and consummating the transactions contemplated by the merger agreement. None of Parent, Intermediate and Merger Sub has engaged in any business except for activities incidental to its formation and in connection with the transactions contemplated by the merger agreement. Upon the consummation of the merger, Merger Sub will be merged with and into the Company, and Merger Sub will cease to exist and the Company will continue as the surviving corporation, a wholly owned subsidiary of Intermediate and an indirect wholly owned subsidiary of Parent. See the section of this proxy statement entitled “The Companies — BHN Holdings, Inc., BHN Intermediate Holdings, Inc. and BHN Merger Sub, Inc.”

The Special Meeting (page 23)

Date, Time and Place of the Special Meeting

The special meeting of stockholders of Blackhawk (referred to in this proxy statement as the “special meeting”) will be held at [       ], on [          ], at [             ] a.m. local time.

Purposes of the Special Meeting

At the special meeting, Blackhawk stockholders will be asked to consider and vote on the following proposals:

Our stockholders must adopt the merger agreement for the merger to occur. If our stockholders fail to adopt the merger agreement, the merger will not occur. See the sections of this proxy statement entitled “The Special Meeting” and “The Merger Agreement.”

Only business that is specified in the notice of the special meeting may be transacted at the special meeting. Any action may be taken on the items of business described above at the special meeting on the date specified above, or on any date or dates to which, by original or later adjournment, the special meeting may be adjourned.

Record Date, Notice and Quorum

The holders of record of Blackhawk common stock as of the close of business on [          ], the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting. At the close of business on the record date, [          ] shares of Company common stock were outstanding and entitled to vote at the special meeting.

The presence at the special meeting, in person or represented by proxy, of the holders of a majority in voting power of the shares of capital stock of the Company issued and outstanding as of the close of business on the record date will constitute a quorum for purposes of the special meeting. A quorum is necessary to transact business at the special meeting. If a quorum is not present at the special meeting, we expect that the special meeting will be adjourned to a later date.

Abstentions will be counted as shares present for purposes of determining the presence of a quorum. If your shares are held in “street name” by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, your broker, bank or other nominee will not vote on your behalf with respect to any of the proposals, and your shares will not be counted for purposes of determining whether a quorum is present for the transaction of business at the special meeting.

Required Vote

Each share of common stock outstanding at the close of business on the record date is entitled to one vote on each of the proposals to be considered at the special meeting.

For the Company to complete the merger, Blackhawk stockholders holding a majority of the shares of Company common stock outstanding at the close of business on the record date must vote “FOR” the proposal to adopt the merger agreement. An abstention with respect to the proposal to adopt the merger agreement, or a failure to vote your shares of common stock (including a failure to instruct your broker, bank or other nominee to vote shares held on your behalf), will have the same effect as a vote “AGAINST” this proposal.

Approval of each of (1) the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and (2) the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies or in the absence of a quorum, requires the affirmative vote of the holders of a majority in voting power of the shares of common stock present in person or by proxy at the special meeting and entitled to vote thereon, but is not a condition to the completion of the merger. An abstention with respect to either proposal will have the same effect as a vote “AGAINST” these proposals. A failure to return your proxy card or otherwise vote your shares of common stock (including a failure of your broker, bank or other nominee to vote shares held on your behalf) will have no effect on these proposals, assuming a quorum is present.

The Company’s directors and executive officers have informed us that they intend to vote their shares of Company common stock in favor of the proposal to adopt the merger agreement and the other proposals to be considered at the special meeting, although they have no obligation to do so. As of the close of business on the record date, our directors and executive officers owned and were entitled to vote, in the aggregate, approximately [       ] shares of Company common stock, or approximately [      ]% of the outstanding shares of Company common stock entitled to vote at the special meeting.

Proxies; Revocation

Any Blackhawk stockholder of record entitled to vote at the special meeting may submit a proxy by telephone or over the Internet, or by returning the enclosed proxy card, or may vote in person at the special meeting. If your shares of common stock are held in “street name” by your broker, bank or other nominee, you should instruct your broker, bank or other nominee on how to vote your shares using the instructions provided by your broker, bank or other nominee.

Any proxy may be revoked at any time prior to its exercise by submitting a properly executed, later-dated proxy through any of the methods available to you, by giving written notice of revocation to our General Counsel and Secretary at Blackhawk Network Holdings, Inc., 6220 Stoneridge Mall Road, Pleasanton, CA 94588, or by attending the special meeting and voting in person.

The Merger (page 28)

You will be asked to consider and vote upon the proposal to adopt the merger agreement. A copy of the merger agreement is attached to this proxy statement as Annex A. The merger agreement provides, among other things, that at the effective time of the merger (referred to in this proxy statement as the “effective time”), Merger Sub will be merged with and into the Company, with the Company surviving the merger (referred to in this proxy statement as the “surviving corporation”). In the merger, each share of common stock, par value $0.001 per share, of the Company (referred to in this proxy statement as the “common stock,” the “Company common stock” or the “Blackhawk common stock”) issued and outstanding immediately before the effective time (other than certain shares specified in the merger agreement) will be converted into the right to receive $45.25 per share in cash, without interest (referred to in this proxy statement as the “per share merger consideration”), and subject to required withholding taxes. Upon completion of the merger, the Company will be an indirect wholly owned subsidiary of Parent, the Company common stock will no longer be publicly traded and the Company’s existing stockholders will cease to have any ownership interest in the Company.

Treatment of Company Equity Awards (page 60)

Except as may be otherwise agreed between Parent and an award holder, awards in respect of Blackhawk common stock that are outstanding immediately prior to the effective time would be treated in the merger as described below.

Stock Options and Stock Appreciation Rights. At the effective time, each award of stock options or stock appreciation rights (referred to in this proxy statement as “SARs”) in respect of Blackhawk common stock that is then outstanding, whether vested or unvested, would become fully vested and be settled, with respect to each share of Blackhawk common stock subject to the award, for the excess of the per share merger consideration over the applicable per share exercise price.

Restricted Shares. At the effective time, each share of Blackhawk common stock that is then outstanding and subject to a restricted share award would become fully vested and settled for a cash payment equal to the per share merger consideration.

Restricted Stock Units. At the effective time, each Blackhawk restricted stock unit (referred to in this proxy statement as an “RSU”) award:

Performance Shares. At the effective time, each Blackhawk performance share award that is then outstanding would vest (based on actual performance for completed performance periods and target performance for incomplete performance periods) and be settled, with respect to each share of Blackhawk common stock subject to the award, for the per share merger consideration.

Conditions to Completion of the Merger (page 74)

Each party’s obligation to complete the merger is subject to the satisfaction or waiver at or before the effective time of each of the following conditions:

The respective obligations of Parent and Merger Sub to complete the merger are subject to the satisfaction or waiver by Parent at or before the effective time of the following additional conditions:

The obligation of the Company to complete the merger is subject to the satisfaction or waiver by the Company at or before the effective time of the following additional conditions:

Recommendation of the Blackhawk Board of Directors (page 33)

After careful consideration, the Blackhawk board of directors unanimously determined that the merger agreement, merger and other transactions contemplated by the merger agreement are fair to, and in the best interests of, the Company and its stockholders (other than Parent, Merger Sub and any of Parent’s other direct or indirect wholly owned subsidiaries), and unanimously approved and declared advisable the merger agreement, the merger and the other transactions contemplated by the merger agreement. The Blackhawk board of directors unanimously recommends that Blackhawk stockholders vote “FOR” the proposal to adopt the merger agreement at the special meeting and “FOR” the other proposals to be considered at the special meeting.

Reasons for the Merger (page 33)

For a description of the reasons considered by the Blackhawk board of directors in resolving to recommend in favor of the adoption of the merger agreement, see the section of this proxy statement entitled “The Merger — Reasons for the Merger; Recommendation of the Blackhawk Board of Directors.”

Opinion of Blackhawk’s Financial Advisor (page 40)

In connection with the merger, at the meeting of the Blackhawk board of directors on January 14, 2018, Sandler O’Neill & Partners, L.P. (referred to in this proxy statement as “Sandler O’Neill”) rendered its oral opinion to the Blackhawk board of directors, confirmed by delivery of a written opinion, dated January 14, 2018, that as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the per share merger consideration is fair, from a financial point of view, to the holders of Company common stock (other than Parent, Merger Sub and any of Parent’s other direct or indirect wholly owned subsidiaries).

The full text of the written opinion of Sandler O’Neill, dated January 14, 2018, which outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken, is attached as Annex B to this proxy statement and is incorporated herein by reference. The summary of the opinion of Sandler O’Neill set forth in this proxy statement is qualified in its entirety by reference to the full text of such opinion. The Company’s stockholders are urged to read the opinion in its entirety. Sandler O’Neill’s written opinion was addressed to the Blackhawk board of directors (in its capacity as such) in connection with its consideration of the merger agreement and the merger and does not constitute a recommendation to any stockholder of Blackhawk as to how any such stockholder should vote at any meeting of shareholders called to consider and vote upon the adoption of the merger agreement and approval of the merger. Sandler O’Neill’s opinion is directed only to the fairness, from a financial point of view, of the per share merger consideration to the holders of Blackhawk common stock (other than Parent, Merger Sub, and any of Parent’s other direct or indirect wholly-owned subsidiaries) and does not address the underlying business decision of Blackhawk to engage in the merger, the form or structure of the merger or any other transactions contemplated in the merger agreement, the relative merits of the merger as compared to any other alternative transactions or business strategies that might exist for Blackhawk or the effect of any other transaction in which Blackhawk might engage.

For further information, see the section of this proxy statement entitled “The Merger — Opinion of Blackhawk’s Financial Advisor” and the full text of the written opinion of Sandler O’Neill attached as Annex B to this proxy statement.

Interests of Blackhawk’s Directors and Executive Officers in the Merger (page 50)

In considering the recommendation of the Blackhawk board of directors that Blackhawk stockholders vote in favor of the adoption of the merger agreement, Blackhawk stockholders should be aware that the directors and executive officers of Blackhawk have potential interests in the merger that may be different from or in addition to the interests of Blackhawk stockholders generally. The Blackhawk board of directors was aware of these interests and considered them, among other matters, in approving the merger agreement and in making its recommendation that Blackhawk’s stockholders vote in favor of the adoption of the merger agreement. These interests include:

For a more complete description of these interests, see “The Merger — Interests of Blackhawk’s Directors and Executive Officers in the Merger.”

Voting and Support Agreement (page 54)

On January 15, 2018, Parent entered into a voting and support agreement with P2 Capital Master Fund I, L.P., a Cayman Islands exempted limited partnership, P2 Capital Master Fund VI, L.P., a Delaware limited partnership, and P2 Capital Master Fund XII, L.P., a Delaware limited partnership (referred to in this proxy statement collectively as the “P2 Stockholders”) and P2 Capital Partners, LLC, a Delaware limited liability company (referred to in this proxy statement as the “P2 Manager” and, together with the P2 Stockholders, as the “P2 Parties”), pursuant to which the P2 Stockholders agreed, among other things, to vote the shares of Company common stock over which they have voting power (1) in favor of the adoption of the merger agreement, approval of the merger and the transactions contemplated by the merger agreement and in favor of any other matter submitted to the Company’s stockholders necessary to consummate the merger and (2) against a change in the Company’s board of directors, against acquisition proposals and against any other proposal or action that would constitute a breach of the merger agreement or prevent, frustrate, impede, interfere with, materially delay or adversely affect the merger or other transactions contemplated by the merger agreement. In addition, each of the P2 Stockholders irrevocably granted to, and appointed, Parent and any duly appointed designee thereof as such P2 Stockholder’s proxy and attorney-in-fact, for and in the name, place and stead of such P2 Stockholder, to attend any meeting of the Company’s shareholders on behalf of such P2 Stockholder with respect to the matters set forth above in clauses (1) and (2), to include such P2 Stockholder’s shares of Company common stock in any computation for purposes of establishing a quorum at any such meeting and to vote such P2 Stockholder’s shares of Company common stock in connection with any such meeting. As of the close of business on [         ], the record date for the special meeting, the P2 Stockholders owned [         ] shares, or approximately [         ]% of the shares of Company common stock outstanding and entitled to vote at the special meeting. The voting and support agreement also contains certain restrictions on the transfer of shares of Company common stock by the P2 Stockholders and contains a waiver of appraisal rights. See the section of this proxy statement entitled “The Merger — Voting and Support Agreement.”

Financing for the Merger (page 47)

We anticipate that the total amount of funds needed to complete the merger (including the funds to pay (1) Blackhawk stockholders the amounts due to them under the merger agreement, (2) fees and expenses in connection with the merger and the financing of the merger, (3) for the refinancing of certain of Blackhawk’s existing indebtedness and (4) amounts due in respect of the Company’s convertible notes in connection with or relating to the merger) will be approximately $3.5 billion. We expect this amount will be funded through a combination of equity and debt sources described below and cash on hand at the Company and its subsidiaries.

In connection with the merger agreement, (1) each of Silver Lake Partners V, L.P. (referred to in this proxy statement as “SLP Equity Investor”) and P2 Capital Master Fund I, L.P. (referred to in this proxy statement as “P2 Equity Investor”) delivered to Blackhawk an equity commitment letter dated as of January 15, 2018 (referred to in this proxy statement collectively as the “equity commitment letters”) representing aggregate equity commitments of $1.757 billion (referred to in this proxy statement as the “equity financing”) and (2) Intermediate and Merger Sub have obtained an amended and restated debt commitment letter, dated as of February 2, 2018 (referred to in this proxy

statement as the “debt commitment letter”), from Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, JPMorgan Chase Bank, N.A., Barclays Bank PLC, Citigroup Global Markets Inc., Goldman Sachs Bank USA, Wells Fargo Bank, National Association, Wells Fargo Securities, LLC, Bank of Montreal, BMO Capital Markets Corp., Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., Fifth Third Bank, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Royal Bank of Canada, SunTrust Robinson Humphrey, Inc. and SunTrust Bank, pursuant to which certain parties have committed, upon certain terms and subject to certain conditions, to lend to Merger Sub (prior to the merger) and to Blackhawk (immediately after the merger) a total of up to $2.15 billion, including a committed revolving credit facility of up to $400 million, a portion of which will be available at the closing of the merger. See the section of this proxy statement entitled “The Merger — Financing for the Merger.”

We have agreed to use our reasonable best efforts to provide, cause our subsidiaries to use their reasonable best efforts to provide and use our reasonable best efforts to cause our and our subsidiaries’ representatives to provide, all cooperation reasonably requested by Parent necessary and customary in connection with the arrangement of the financing contemplated by the debt commitment letter. For more information, see the section of this proxy statement entitled “The Merger Agreement — Financing and Financing Cooperation.”

The equity and debt financings are subject to the satisfaction of the conditions set forth in the commitment letters described below. Although obtaining the equity or debt financing is not a condition to the completion of the merger, the failure of Parent and its subsidiaries to obtain sufficient financing at the effective time of the merger would likely result in the failure of the merger to be completed. In that case, Parent may be obligated to pay the Company a fee of $136.2 million as described in the section of this proxy statement entitled “The Merger Agreement — Parent Termination Fee.” Payment of such fee is guaranteed by the guarantors as described in the section of this proxy statement entitled “The Merger — Limited Guarantees.”

Limited Guarantees (page 50)

In connection with the execution of the merger agreement, SLP Equity Investor and P2 Equity Investor have each executed and delivered a limited guarantee in favor of the Company (referred to in this proxy statement collectively as the “limited guarantees”), pursuant to which SLP Equity Investor and P2 Equity Investor, severally and not jointly, have unconditionally and irrevocably guaranteed, on the terms and conditions set forth therein, the due and punctual observance, performance and discharge of their respective applicable percentage of certain payment obligations of Parent. See the section of this proxy statement entitled “The Merger — Limited Guarantees.”

Material U.S. Federal Income Tax Consequences of the Merger (page 54)

The receipt of cash in exchange for shares of common stock pursuant to the merger will generally be a taxable transaction for U.S. federal income tax purposes, and may also be a taxable transaction under applicable state, local or foreign income or other tax laws. In general, for U.S. federal income tax purposes, a U.S. holder (as defined in the section of this proxy statement entitled “The Merger — Material U.S. Federal Income Tax Consequences of the Merger”) who receives cash in exchange for shares of common stock pursuant to the merger will recognize capital gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received and (2) the U.S. holder’s adjusted tax basis in such shares. You should consult your own tax advisor regarding the particular tax consequences to you of the exchange of shares of common stock for cash pursuant to the merger in light of your particular circumstances (including the application and effect of any state, local or foreign income and other tax laws). See the section of this proxy statement entitled “The Merger — Material U.S. Federal Income Tax Consequences of the Merger.”

Regulatory Approvals (page 56)

HSR Clearance. Under the HSR Act and related rules, certain transactions, including the merger, may not be completed until notifications have been given and information furnished to the Antitrust Division of the United States Department of Justice (referred to in this proxy statement as the “Antitrust Division”) and the United States Federal Trade Commission (referred to in this proxy statement as the “FTC”) and all statutory waiting period requirements have been satisfied. Completion of the merger is subject to the expiration or termination of the applicable waiting period under the HSR Act. Notification and Report Forms were filed in respect of Parent and the Company with the Antitrust Division and the FTC on January 29, 2018. Early termination of the applicable waiting period under the HSR Act was granted on February 7, 2018.

Germany Antitrust Clearance. Pursuant to the GWB, certain transactions, including the merger, may not be completed until filings are made with the Federal Cartel Office (referred to in this proxy statement as the “FCO”)

and the transactions are cleared by the FCO, or deemed to have been cleared by the FCO due to the expiration of the applicable time limit under the GWB. Completion of the merger is subject to the clearance or deemed clearance of the merger under the GWB. German counsel filed with the FCO on behalf of Parent and the Company on January 30, 2018. The FCO cleared the merger on February 5, 2018.

Australia Foreign Investment Review Board. Pursuant to the FATA, certain acquisitions by foreign persons of Australian companies, businesses and real property assets, including the merger, must be notified to the Foreign Investment Review Board (referred to in this proxy statement as “FIRB”) for approval by the Australian Treasurer. Intermediate submitted a FIRB application on January 26, 2018. The filing fee was accepted on February 9, 2018, beginning the review process.

Money Transmitter and Other Licensing Requirements. Blackhawk holds money transmitter licenses in numerous U.S. and foreign jurisdictions. The money transmission laws and regulations of certain of these jurisdictions require that, prior to the acquisition of control of a licensee, the licensee and/or acquiror must notify the applicable regulatory authority, make certain filings with such regulatory authority, and/or obtain the approval of such regulatory authority. It is a condition to each party’s obligation to complete the merger that all consents applicable to the completion of the merger (or confirmation that no consent is required) will have been made or obtained, as applicable, from the applicable regulatory authority in (1) the United Kingdom, (2) Ontario, Canada (which is regarding Blackhawk’s lottery/gaming license and is not a money transmitter license) and (3) 35 U.S. states, Puerto Rico and the District of Columbia.

Commitments to Obtain Approvals. The Company and Parent are each required to use reasonable best efforts to take all actions reasonably necessary, proper or advisable to complete the merger, including cooperating to obtain regulatory approvals. This includes, if required by regulatory authorities, proposing, negotiating, and committing to and effecting the sale, divestiture, license or other disposition of the assets, properties or businesses of Blackhawk, Parent, or their respective subsidiaries, provided that any such disposition is conditioned upon regulatory approval. See the section of this proxy statement entitled “The Merger Agreement — Efforts to Complete the Merger — Regulatory Matters.”

Appraisal Rights (page 85)

Under Section 262 of the DGCL, Blackhawk stockholders who do not vote for the adoption of the merger agreement will have the right to seek appraisal of the fair value of their shares in cash as determined by the Delaware Court of Chancery, but only if they comply fully with all of the applicable requirements of the DGCL, which are summarized in this proxy statement. Any appraisal amount determined by the court could be more than, the same as, or less than the value of the per share merger consideration. Any stockholder intending to exercise appraisal rights must, among other things, submit a written demand for appraisal to the Company before the vote on the adoption of the merger agreement and must not vote or otherwise submit a proxy in favor of adoption of the merger agreement. Failure to follow exactly the procedures specified under the DGCL will result in the loss of appraisal rights. Because of the complexity of the DGCL relating to appraisal rights, if you are considering exercising your appraisal rights, we encourage you to seek the advice of your own legal counsel. The discussion of appraisal rights contained in this proxy statement is not a full summary of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262 of the DGCL that is attached to this proxy statement as Annex C.

Delisting and Deregistration of Company Common Stock (page 57)

If the merger is completed, the Company common stock will be delisted from the NASDAQ Stock Market (referred to in this proxy statement as the “NASDAQ”) and deregistered under the U.S. Securities Exchange Act of 1934, as amended (referred to in this proxy statement as the “Exchange Act”).

Acquisition Proposals; No Solicitation (page 67)

Pursuant to the merger agreement, until one minute after 11:59 p.m. (New York City time) on February 9, 2018, Blackhawk, its subsidiaries, and their respective representatives, were permitted to:

affiliates and its prospective equity and debt financing sources pursuant to a confidentiality agreement meeting certain requirements (provided that the Company made available to Parent any non-public information before, or substantially concurrently with, the time such information was made available to any such person, and any competitively sensitive information or data provided to any person who is, or whose affiliates include, a direct competitor, supplier or customer of the Company or any of its subsidiaries was provided in a separate “clean data room” and subject to customary “clean team” arrangements); and

Beginning at 12:00 a.m. (New York City time) on February 10, 2018, Blackhawk and its subsidiaries and their respective directors, officers and employees were required to cease, and Blackhawk was required to instruct and use its reasonable best efforts to cause Blackhawk’s and its subsidiaries’ respective representatives to cease, any activities described above and any existing activities, solicitations, discussions or negotiations with any parties previously conducted with respect to any acquisition proposal.

From 12:00 a.m. (New York City time) on February 10, 2018 until the earlier of the effective time or the termination of the merger agreement in accordance with its terms, Blackhawk and its subsidiaries and their respective directors, officers and employees must not, and Blackhawk must instruct and use its reasonable best efforts to cause Blackhawk’s and its subsidiaries’ respective representatives not to:

From and after 12:00 a.m. (New York City time) on February 10, 2018, Blackhawk must promptly (and, in any event, within twenty-four hours) notify Parent if any inquiries, proposals or offers with respect to an acquisition proposal or that may reasonably be expected to lead to an acquisition proposal are received by, any information is requested from, or any related discussions or negotiations are sought to be initiated or continued with, Blackhawk or any of its representatives. Blackhawk must indicate the name of the person making the acquisition proposal and provide unredacted copies of any written requests, proposals or offers, including proposed agreements, the material terms and conditions of any proposals or offers and must keep Parent reasonably informed, on a current basis, of the status and terms of any such inquiries, proposals or offers (including any amendments) and the status of any such discussions or negotiations.

However, before the requisite company vote is obtained, if Blackhawk receives an unsolicited bona fide written acquisition proposal that did not result from a breach of the non-solicitation provisions described above, and if (1) the Blackhawk board of directors determines in good faith, after consultation with its outside legal counsel and financial advisor, that failure to take the action described below, in light of the acquisition proposal and the terms of the merger agreement, would be reasonably likely to be inconsistent with its fiduciary duties under applicable law and (2) the Blackhawk board of directors has determined in good faith, based on the information then available and after consultation with its outside legal counsel and financial advisor, that the acquisition proposal constitutes a “superior proposal,” as described in the section of this proxy statement entitled “The Merger Agreement — Acquisition Proposals; No Solicitation — Receipt of Acquisition Proposals,” or would reasonably be expected to result in a superior proposal, then Blackhawk and its representatives may:

Change in Board Recommendation (page 69)

The Blackhawk board of directors has unanimously recommended that Blackhawk stockholders vote “FOR” the proposal to adopt the merger agreement. The merger agreement permits the Blackhawk board of directors to effect a “change of recommendation” (as described in the section of this proxy statement entitled “The Merger Agreement — Acquisition Proposals; No Solicitation — Change in Board Recommendation”) only in certain circumstances, as described below.

Before the requisite company vote is obtained, the Blackhawk board of directors may (1) make a change of recommendation if an “intervening event” (as described in the section of this proxy statement entitled “The Merger Agreement — Acquisition Proposals; No Solicitation — Change in Board Recommendation”) has occurred and the Blackhawk board of directors determines in good faith, after consultation with its outside legal counsel and financial advisor, that failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law or (2) make a change of recommendation or, prior to 12:00 a.m. (New York City time) on February 10, 2018, authorize Blackhawk to terminate the merger agreement and enter into a definitive written agreement with respect to a superior proposal if Blackhawk receives an acquisition proposal and (i) the Blackhawk board of directors determines in good faith, based on the information then available and after consultation with its outside legal counsel and financial advisor, that failure to take such action, in light of the acquisition proposal and the terms of the merger agreement, would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law and (ii) the Blackhawk board of directors has determined in good faith, based on the information then available and after consultation with its outside legal counsel and financial advisor, that such acquisition proposal constitutes a superior proposal, provided that:

See the section of this proxy statement entitled “The Merger Agreement — Acquisition Proposals; No Solicitation — Change in Board Recommendation.”

Termination (page 75)

The merger agreement may be terminated and the merger may be abandoned in the following circumstances:

“marketing period” (as described below in the section of this proxy statement entitled “The Merger Agreement — When the Merger Becomes Effective”), if the marketing period has commenced but not yet been completed (or would have commenced but for certain blackout dates) as of July 31, 2018 (this termination right is referred to in this proxy statement as the “outside date termination right”); or

provided that the right to terminate the merger agreement pursuant to the termination provisions referred to in the preceding bullet points will not be available to any party that breached in any material respect its obligations under the merger agreement in any manner that was the primary cause of the failure of a condition to completion of the merger;

Company Termination Fee and Expense Reimbursement (page 76)

In the following circumstances, Blackhawk will pay designees notified to Blackhawk by Parent a termination fee in an amount equal to $109,000,000 (referred to in this proxy statement as the “company termination fee”):

Blackhawk will reimburse the P2 Manager and Silver Lake Management Company V, L.L.C. (or their respective designees) for the documented out-of-pocket expenses incurred by Parent or Merger Sub in connection with the merger agreement and the transactions contemplated by the merger agreement including the financing (including fees and expenses of counsel, accountants, investment bankers, other advisors and financing sources) (1) subject to an aggregate cap on reimbursement of $6,800,000, if Blackhawk or Parent terminates the merger agreement pursuant to the stockholder approval termination right, Blackhawk terminates the merger agreement pursuant to the superior proposal termination right or Parent terminates the merger agreement pursuant to the change of recommendation termination right, the tender offer recommendation termination right or the Blackhawk breach termination right and the company termination fee is payable by Blackhawk as a result of such termination, or (2) subject to an aggregate cap on reimbursement of $27,200,000, if Blackhawk or Parent terminates the merger agreement pursuant to the stockholder approval termination right at a time when neither the company termination fee nor the parent termination fee is otherwise payable (although damages may still be payable by Blackhawk).

Parent Termination Fee (page 77)

Parent will pay Blackhawk a termination fee in an amount equal to $136,200,000 (referred to in this proxy statement as the “parent termination fee”) if the merger agreement is terminated by Blackhawk pursuant to the parent breach termination right or the failure to close termination right.

Market Price of the Company Common Stock (page 81)

The Company common stock is listed on the NASDAQ under the symbol “HAWK.” The closing sale price of our common stock on January 12, 2018, the last trading day prior to the execution of the merger agreement, was $36.50 per share. On [       ], 2018, the most recent practicable date before the filing of this proxy statement, the closing price for our common stock was $[       ] per share. You are encouraged to obtain current market quotations for our common stock in connection with voting your shares of common stock.

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers address briefly some questions you may have regarding the special meeting and the proposals to be voted on at the special meeting. These questions and answers may not address all of the questions that may be important to you as a stockholder of the Company. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement, which you should read carefully and in their entirety. You may obtain the documents incorporated by reference into this proxy statement without charge by following the instructions in the section of this proxy statement entitled “Where You Can Find Additional Information.”

As of the close of business on [         ], the record date for the special meeting, there were [         ] shares of common stock issued and outstanding.

If you submit a proxy but fail to provide voting instructions or abstain on any of the proposals listed on the proxy card, your shares will be counted for the purpose of determining whether a quorum is present at the special meeting.

If your shares are held in “street name” by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, your broker, bank or other nominee will not vote on your behalf with respect to any of the proposals, and your shares will not be counted for purposes of determining whether a quorum is present for the transaction of business at the special meeting.

An abstention with respect to the proposal to adopt the merger agreement, or a failure to vote your shares of common stock (including a failure to instruct your broker, bank or other nominee to vote shares held on your behalf), will have the same effect as a vote “AGAINST” this proposal.

An abstention with respect to either proposal will have the same effect as a vote “AGAINST” these proposals. A failure to return your proxy card or otherwise vote your shares of common stock (including a failure of your broker, bank or other nominee to vote shares held on your behalf), will have no effect on these proposals, assuming a quorum is present.

For a discussion of the factors that the Blackhawk board of directors considered in determining to recommend in favor of the adoption of the merger agreement, see the section of this proxy statement entitled “The Merger — Reasons for the Merger; Recommendation of the Blackhawk Board of Directors.” In addition, in considering the recommendation of the Blackhawk board of directors with respect to the merger agreement, you should be aware that some of our directors and executive officers have interests that may be different from, or in addition to, the interests of Blackhawk stockholders generally. For a discussion of these interests, see the section of this proxy statement entitled “The Merger — Interests of Blackhawk’s Directors and Executive Officers in the Merger.”

Voting in Person

Stockholders of record will be able to vote in person at the special meeting. If you are not a stockholder of record but instead hold your shares of common stock in “street name” through a broker, bank or other nominee, you must provide a legal proxy executed in your favor from your broker, bank or other nominee in order to be able to vote in person at the special meeting.

It is not necessary to attend the special meeting in order to vote your shares. To ensure that your shares of common stock are voted at the special meeting, we recommend that you provide voting instructions promptly by proxy, even if you plan to attend the special meeting in person.

Attending the special meeting in person does not itself constitute a vote on any proposal.

Shares of Common Stock Held by Record Holder

You can ensure that your shares are voted at the special meeting by submitting your proxy via:

The telephone and Internet voting facilities for stockholders of record will close at 11:59 p.m. PDT on [         ].

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” (1) the proposal to adopt the merger agreement, (2) the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and (3) the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement or in the absence of a quorum.

We encourage you to vote by proxy even if you plan on attending the special meeting.

A failure to vote or an abstention will have the same effect as a vote “AGAINST” the adoption of the merger agreement.

Shares of Common Stock Held in “Street Name”

If you hold your shares in “street name” through a broker, bank or other nominee, you should follow the directions provided by your broker, bank or other nominee regarding how to instruct your broker, bank or other nominee to vote your shares. Without those instructions, your shares will not be voted, which will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

If you hold your shares in “street name” and you have instructed a broker, bank or other nominee to vote your shares, you should instead follow the instructions received from your broker, bank or other nominee to revoke your prior voting instructions. If you hold your shares in “street name,” you may also revoke a prior proxy by voting in person at the special meeting if you obtain a legal proxy executed in your favor from your broker, bank or other nominee in order to be able to vote in person at the special meeting.

The requisite number of shares to approve the other two proposals is based on the total number of shares of common stock present in person or by proxy at the special meeting and entitled to vote thereon. If you abstain from voting on (1) the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and (2) the proposal regarding adjournment of the special meeting, it will have the same effect as a vote “AGAINST” these proposals. If you do not return your proxy card or otherwise fail to vote your shares of common stock (including a failure of your broker, bank or other nominee to vote shares held on your behalf), it will have no effect on these proposals, assuming a quorum is present.

The record date for stockholders entitled to vote at the special meeting is earlier than the completion of the merger. If you transfer your shares of common stock after the close of business on the record date but before the closing of the merger, you will have the right to vote at the special meeting but not the right to receive the per share merger consideration.

instructions for exchanging your shares of common stock evidenced by stock certificates or book-entry shares for the per share merger consideration. If your shares of common stock are held in “street name” by your broker, bank or other nominee, you may receive instructions from your broker, bank or other nominee as to what action, if any, you need to take to effect the surrender of your “street name” shares in exchange for the per share merger consideration.

[         ]
Banks and Brokerage Firms Call: [         ]
Stockholders Call Toll Free: [         ]
Email: [         ]

If your broker, bank or other nominee holds your shares, you should also call your broker, bank or other nominee for additional information.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

Certain statements contained in this proxy statement, and the documents incorporated by reference in this proxy statement, may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (referred to in this proxy statement as the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934. Also, documents we subsequently file with the SEC and incorporate by reference may contain forward-looking statements. Forward-looking statements are indicated by words or phrases such as “guidance,” “believes,” “expects,” “intends,” “forecasts,” “can,” “could,” “may,” “anticipates,” “estimates,” “plans,” “projects,” “seeks,” “should,” “targets,” “will,” “would,” “outlook,” “continuing,” “ongoing,” and similar words or phrases and the negative of such words and phrases. Forward-looking statements are based on the Company’s current plans and expectations and involve risks and uncertainties which are, in many instances, beyond the Company’s control, and which could cause actual results to differ materially from those included in or contemplated or implied by the forward-looking statements. In addition to other factors and matters contained in or incorporated by reference in this document, we believe such risks and uncertainties include the following:

and other risks and uncertainties described in the Company’s reports and filings with the SEC, including the risks and uncertainties set forth in Item 1A under the heading Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 27, 2017 and other periodic reports the Company files with the SEC. See the section of this proxy statement entitled “Where You Can Find Additional Information.”

The Company undertakes no obligation to update forward-looking statements to reflect developments or information obtained after the date they are made and disclaims any obligation to do so other than as may be required by law. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made.

THE COMPANIES

Blackhawk Network Holdings, Inc.

Blackhawk is a Delaware corporation. Blackhawk (NASDAQ: HAWK) is a global financial technology company and a leader in connecting brands and people through branded value solutions. Blackhawk platforms and solutions enable the management of branded value products, promotions and rewards programs in retail, ecommerce, financial services and mobile wallets. Blackhawk’s Hawk Commerce division offers technology solutions to businesses and direct to consumers. The Hawk Incentives division offers enterprise, SMB and reseller partners an array of platforms and branded value products to incent and reward consumers, employees and sales channels. Headquartered in Pleasanton, California, Blackhawk operates in 26 countries.

Blackhawk’s principal executive offices are located at 6220 Stoneridge Mall Road, Pleasanton, California 94588 and its telephone number is (925) 226-9990.

A detailed description of the Company’s business is contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC on February 27, 2017, which is incorporated by reference into this proxy statement. See the section of this proxy statement entitled “Where You Can Find Additional Information.”

BHN Holdings, Inc., BHN Intermediate Holdings, Inc. and BHN Merger Sub, Inc.

Parent is a newly formed Delaware corporation. Intermediate is a newly formed Delaware corporation and a wholly owned subsidiary of Parent. Merger Sub is a newly formed Delaware corporation and a wholly owned subsidiary of Intermediate. Each of Parent, Intermediate and Merger Sub is an affiliate of SLP Equity Investor and was formed solely for the purpose of entering into the merger agreement and consummating the transactions contemplated by the merger agreement. None of Parent, Intermediate and Merger Sub has engaged in any business except for activities incidental to its formation and in connection with the transactions contemplated by the merger agreement. Upon the consummation of the merger, Merger Sub will be merged with and into the Company, and Merger Sub will cease to exist and the Company will continue as the surviving corporation, a wholly owned subsidiary of Intermediate and an indirect wholly owned subsidiary of Parent. The principal executive offices of each of Parent, Intermediate and Merger Sub are located at c/o Silver Lake Partners, 9 West 57th Street, 32nd Floor New York, NY 10019 and their telephone number is (212) 981-5600.

THE SPECIAL MEETING

We are furnishing this proxy statement to the Company’s stockholders as part of the solicitation of proxies by the Blackhawk board of directors for use at the special meeting or any adjournment or postponement thereof. This proxy statement provides the Company’s stockholders with the information they need to know to be able to vote or instruct their vote to be cast at the special meeting or any adjournment or postponement thereof.

Date, Time and Place of the Special Meeting

This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by the Blackhawk board of directors for use at the special meeting to be held at [         ], on [         ], at [         ] a.m. local time, or at any adjournment or postponement thereof.

For information regarding attending the special meeting, see “— Voting; Proxies; Revocation — Attendance.”

Purposes of the Special Meeting

At the special meeting, Blackhawk stockholders will be asked to consider and vote on the following proposals:

Our stockholders must adopt the merger agreement for the merger to occur. If our stockholders fail to adopt the merger agreement, the merger will not occur. A copy of the merger agreement is attached to this proxy statement as Annex A, and certain provisions of the merger agreement are described in the section of this proxy statement entitled “The Merger Agreement.”

The vote on the named executive officer merger-related compensation proposal is a vote separate and apart from the vote on the proposal to adopt the merger agreement. Accordingly, you may vote to adopt the merger agreement and vote not to approve the named executive officer merger-related compensation proposal and vice versa. Because the vote on the named executive officer merger-related compensation proposal is advisory only, it will not be binding on either Blackhawk or Parent. Accordingly, if the merger agreement is adopted and the merger is completed, the compensation will be payable, subject only to the conditions applicable thereto under the applicable compensation agreements and arrangements, regardless of the outcome of the non-binding, advisory vote of Blackhawk’s stockholders.

Only business that is specified in the notice of special meeting may be transacted at the special meeting. Any action may be taken on the items of business described above at the special meeting on the date specified above, or on any date or dates to which, by original or later adjournment, the special meeting may be adjourned.

This proxy statement and the enclosed form of proxy are first being mailed to our stockholders on or about [         ].

Record Date, Notice and Quorum

The holders of record of Blackhawk common stock as of the close of business on [         ], the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting. At the close of business on the record date, [         ] shares of Company common stock were outstanding and entitled to vote at the special meeting.

The presence at the special meeting, in person or represented by proxy, of the holders of a majority in voting power of the shares of capital stock of the Company issued and outstanding and entitled to vote at the special meeting

at the close of business on the record date will constitute a quorum. Once a share is represented at the special meeting, it will be counted for purposes of determining whether a quorum is present at the special meeting. However, if a new record date is set for an adjourned special meeting, a new quorum will have to be established. Proxies received but marked as abstentions will be included in the calculation of the number of shares considered to be present at the special meeting.

Required Vote

Each share of common stock outstanding at the close of business on the record date is entitled to one vote on each of the proposals to be considered at the special meeting.

For the Company to complete the merger, Blackhawk stockholders holding a majority of the shares of Company common stock outstanding at the close of business on the record date must vote “FOR” the proposal to adopt the merger agreement. An abstention with respect to the proposal to adopt the merger agreement, or a failure to vote your shares of common stock (including a failure to instruct your broker, bank or other nominee to vote shares held on your behalf), will have the same effect as a vote “AGAINST” this proposal.

Approval of each of (1) the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the Company’s named executive officers in connection with the merger and (2) the adjournment proposal requires the affirmative vote of the holders of a majority in voting power of the shares of common stock present in person or by proxy at the special meeting and entitled to vote thereon, but is not a condition to the completion of the merger. An abstention with respect to either proposal will have the same effect as a vote “AGAINST” these proposals. A failure to return your proxy card or otherwise vote your shares of common stock (including a failure of your broker, bank or other nominee to vote shares held on your behalf), will have no effect on these proposals, assuming a quorum is present.

Stock Ownership and Interests of Certain Persons

Voting by the Company’s Directors and Executive Officers

At the close of business on the record date, directors and executive officers of the Company were entitled to vote approximately [         ] shares of Company common stock, or approximately [         ]% of the shares of Company common stock issued and outstanding on that date and entitled to vote at the special meeting. The Company’s directors and executive officers have informed us that they intend to vote their shares in favor of the proposal to adopt the merger agreement and the other proposals to be considered at the special meeting, although they have no obligation to do so.

Voting and Support Agreement

On January 15, 2018, Parent entered into a voting and support agreement with the P2 Parties, pursuant to which the P2 Stockholders agreed, among other things, to vote the shares of Company common stock over which they have voting power in favor of the adoption of the merger agreement, approval of the merger and the transactions contemplated by the merger agreement and in favor of any other matter submitted to the Company’s stockholders necessary to consummate the merger. In addition, each of the P2 Stockholders irrevocably granted to, and appointed, Parent and any duly appointed designee thereof as such P2 Stockholder’s proxy and attorney-in-fact, for and in the name, place and stead of such P2 Stockholder, to attend any meeting of the Company’s shareholders on behalf of such P2 Stockholder with respect to the matters set forth above in the preceding sentence and to vote such P2 Stockholder’s shares of Company common stock in connection with any such meeting. As of the close of business on [         ], the record date for the special meeting, the P2 Stockholders owned [         ] shares, or approximately [         ]% of the shares of Company common stock outstanding and entitled to vote at the special meeting. The voting and support agreement also contains certain restrictions on the transfer of shares of common stock by the P2 Stockholders and contains a waiver of appraisal rights.

Voting; Proxies; Revocation

Attendance

All holders of shares of common stock as of the close of business on [         ], the record date, including stockholders of record and beneficial owners of common stock registered in the “street name” of a broker, bank or other nominee, are invited to attend the special meeting.

To attend the special meeting in person, you must provide proof of ownership of Blackhawk common stock as of the close of business on the record date, such as an account statement indicating ownership on that date, and a form of personal identification for admission to the meeting. If you hold your shares in “street name,” and you also wish to be able to vote at the meeting, you must obtain a legal proxy, executed in your favor, from your bank, broker or other nominee.

Voting in Person

Stockholders of record will be able to vote in person at the special meeting. If you are not a stockholder of record, but instead hold your shares of common stock in “street name” through a broker, bank or other nominee, you must provide a legal proxy executed in your favor from your broker, bank or other nominee in order to be able to vote in person at the special meeting. Attending the special meeting in person does not itself constitute a vote on any proposal.

Providing Voting Instructions by Proxy

To ensure that your shares of common stock are voted at the special meeting, we recommend that you provide voting instructions promptly by proxy, even if you plan to attend the special meeting in person.

Shares of Common Stock Held by Record Holder

If you are a stockholder of record, you may provide voting instructions by proxy using one of the methods described below.

Submit a Proxy by Telephone or via the Internet. This proxy statement is accompanied by a proxy card with instructions for submitting voting instructions. You may vote by telephone by calling the toll-free number or via the Internet by accessing the Internet address specified on the enclosed proxy card. Your shares of common stock will be voted as you direct in the same manner as if you had completed, signed, dated and returned your proxy card, as described below.

Submit a Proxy Card. If you complete, sign, date and return the enclosed proxy card by mail so that it is received in time for the special meeting, your shares of common stock will be voted in the manner directed by you on your proxy card.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of each of the proposal to adopt the merger agreement, the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger, and the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement or in the absence of a quorum. If you fail to return your proxy card or vote by telephone or via the Internet, and you are a holder of record as of the close of business on the record date, unless you attend the special meeting and vote in person, your shares of common stock will not be considered present at the special meeting for purposes of determining whether a quorum is present at the special meeting, which will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement and, assuming a quorum is present, will have no effect on the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger, or the vote regarding the adjournment of the special meeting, if necessary or appropriate, including to solicit additional proxies or in the absence of a quorum.

Shares of Common Stock Held in “Street Name”

If your shares of common stock are held by a broker, bank or other nominee on your behalf in “street name,” your broker, bank or other nominee will send you instructions as to how to provide voting instructions for your shares. Many brokerage firms and banks have a process for their customers to provide voting instructions by telephone or via the Internet, in addition to providing voting instructions by a voting instruction form.

In accordance with applicable stock exchange rules, brokers, banks and other nominees that hold shares of common stock in “street name” for their customers do not have discretionary authority to vote the shares with respect to (1) the proposal to adopt the merger agreement, (2) the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection

with the merger, or (3) the adjournment of the special meeting, if necessary or appropriate, including to solicit additional proxies or in the absence of a quorum. Accordingly, if brokers, banks or other nominees do not receive specific voting instructions from the beneficial owner of such shares, they cannot vote such shares with respect to these proposals. Therefore, unless you attend the special meeting in person with a properly executed legal proxy from your broker, bank or other nominee, your failure to provide instructions to your broker, bank or other nominee will result in your shares of Blackhawk common stock not being present at the meeting and not being voted on any of the proposals. As a result, a failure to vote your shares of common stock (including a failure to instruct your broker, bank or other nominee to vote shares held on your behalf) will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement, but it will have no effect on the other proposals, assuming a quorum is present.

Revocation of Proxies

Any person giving a proxy pursuant to this solicitation has the power to revoke and change it before it is voted. If you are a stockholder of record, you may revoke your proxy before the vote is taken at the special meeting by:

Please note, however, that only your last-dated proxy will count. Attending the special meeting without taking one of the actions described above will not in itself revoke your proxy. Please note that if you want to revoke your proxy by mailing a new proxy card to the Company or by sending a written notice of revocation to the Company, you should ensure that you send your new proxy card or written notice of revocation in sufficient time for it to be received by the Company before the special meeting.

If you hold your shares in “street name” through a broker, bank or other nominee, you will need to follow the instructions provided to you by your broker, bank or other nominee in order to revoke your proxy or submit new voting instructions. If you hold your shares in “street name,” you may also revoke a prior proxy by voting in person at the special meeting if you obtain a legal proxy executed in your favor from your broker, bank or other nominee in order to be able to vote in person at the special meeting.

Abstentions

An abstention occurs when a stockholder attends the special meeting, either in person or represented by proxy, but abstains from voting. Abstentions will be included in the calculation of the number of shares of common stock present or represented at the special meeting for purposes of determining whether a quorum has been achieved.

Abstaining from voting will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement, a vote “AGAINST” the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and a vote “AGAINST” the proposal to approve the adjournment of the special meeting.

Solicitation of Proxies

The Blackhawk board of directors is soliciting your proxy, and the Company will bear the costs of this solicitation. This includes the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of Blackhawk’s outstanding common stock. The Company has retained Innisfree M&A Incorporated, a proxy solicitation firm, to assist the Blackhawk board of directors in the solicitation of proxies for the special meeting, and we expect to pay Innisfree M&A Incorporated approximately $[         ], plus reimbursement of out-of-pocket expenses. Proxies may be solicited by mail, personal interview, e-mail, telephone or via the Internet or, without additional compensation, by certain of the Company’s directors, officers and employees.

Adjournments and Postponements

Although it is not currently expected, the special meeting may be adjourned or postponed if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement or in the absence of a quorum.

Holders of a majority of shares present in person or by proxy at the special meeting, whether or not constituting a quorum, and entitled to vote may adjourn the special meeting. Any adjournment may be made without notice (provided the adjournment is not for more than 30 days) by an announcement at the special meeting of the time, date and place of the adjourned meeting. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting must be given to each stockholder of record entitled to vote at the meeting. Adjournments and postponements are subject to certain restrictions in the merger agreement, including that the special meeting may not be adjourned or postponed except to the extent required by applicable law and with prior notice to Parent or in certain other circumstances.

Other Information

You should not return your stock certificates or send in other documents evidencing ownership of common stock with the proxy card. If the merger is completed, the paying agent for the merger will send you a letter of transmittal and related materials and instructions for exchanging your shares of common stock for the per share merger consideration.

THE MERGER

The description of the merger in this section and elsewhere in this proxy statement is qualified in its entirety by reference to the complete text of the merger agreement, a copy of which is attached as Annex A and is incorporated by reference into this proxy statement. This summary does not purport to be complete and may not contain all of the information about the merger that is important to you. You are encouraged to read the merger agreement carefully and in its entirety.

Certain Effects of the Merger

Pursuant to the terms of the merger agreement, if the merger agreement is adopted by the Company’s stockholders and the other conditions to the closing of the merger are satisfied or waived, Merger Sub will be merged with and into the Company, with the Company surviving the merger as a wholly owned subsidiary of Parent.

Upon the terms and subject to the conditions of the merger agreement, at the effective time, each share of Company common stock issued and outstanding immediately before the effective time (other than shares owned by (1) Parent, Merger Sub or any other direct or indirect wholly owned subsidiary of Parent, and in each case not held on behalf of third parties, (2) the Company or any direct or indirect wholly owned subsidiary of the Company, and in each case not held on behalf of third parties and (3) holders of shares of Company common stock who have perfected and not withdrawn a demand for (or otherwise lost their right to), appraisal rights pursuant to Section 262 of the DGCL) will be converted into the right to receive the per share merger consideration of $45.25 in cash, without interest and subject to required withholding taxes, and will cease to be outstanding, will be cancelled and will cease to exist, upon surrender of certificates or book-entry shares.

The Company common stock is currently registered under the Exchange Act and is listed on the NASDAQ under the symbol “HAWK.” As a result of the merger, the Company will cease to be a publicly traded company and will be an indirect wholly owned subsidiary of Parent. Following the completion of the merger, the Company common stock will be delisted from the NASDAQ and deregistered under the Exchange Act, following which the Company will no longer be required to file periodic reports with the SEC with respect to its common stock in accordance with applicable laws, rules and regulations.

Background of the Merger

As part of its ongoing consideration and evaluation of its long-term prospects and strategies, the Blackhawk board of directors and senior management have regularly and formally reviewed and assessed the Company’s business strategies, objectives and key initiatives, including strategic opportunities and challenges, and have considered various strategic options potentially available to the Company, all with the goal of enhancing value for the Company’s stockholders. The strategic considerations have focused on, among other things, the business environment facing the Company and its industry as well as the Company’s business prospects. From time to time, these strategic opportunities have included consideration of potential investment or business combination transactions and have included discussions with Silver Lake Partners, P2 Capital Partners and other financial sponsors (including the financial sponsor referred to in this proxy statement as “Party A”).

In mid-2017, the Company engaged in discussions with Silver Lake Partners and P2 Capital Partners (a public stockholder of the Company since September 12, 2014) regarding a potential minority private investment in the Company’s equity, the proceeds of which could be used to fund future acquisitions by the Company. The Company entered into a confidentiality agreement with Silver Lake Partners on May 22, 2017, and with P2 Capital Partners on May 25, 2017.

Also in mid-2017, Sandler O’Neill & Partners, L.P. began acting as the Company’s financial advisor in connection with its consideration of potential alternatives to fund the Company’s acquisition strategy, including a potential minority investment by Silver Lake Partners and P2 Capital Partners, as well as to review potential acquisitions by the Company.

Between May 22 and October 11, 2017, the Company, Silver Lake Partners and P2 Capital Partners continued to discuss a potential minority private investment in the Company’s equity.

On October 11, 2017, the Company announced its third quarter results and informed its shareholders and investors that it now expected that its adjusted EBITDA results for the fourth quarter and fiscal year 2017 would be below the midpoint of its previously disclosed guidance for such results and that the U.S. physical retail environment would remain challenging. In the day following this announcement, the Company stock price decreased from $44.20 on October 11, 2017 to $35.15 on October 12, 2017.

On October 18 2017, Michael Bingle, Managing Partner and Managing Director of Silver Lake Partners, and Alexander Silver, a Partner at P2 Capital Partners, contacted Talbott Roche, the Chief Executive Officer and President of the Company, to express interest in an acquisition of the Company by Silver Lake Partners and P2 Capital Partners. Ms. Roche indicated that the Company had not been considering a sale, but would discuss any bona fide offer with the Blackhawk board of directors.

On October 20, 2017, Silver Lake Partners and P2 Capital Partners (referred to in this proxy statement as the “Sponsors”) submitted a non-binding indication of interest in acquiring the Company (referred to in this proxy statement as the “October indication of interest”) at a valuation range of $47.00 – $49.00 per share of common stock, payable in cash, which represented a premium of approximately 37 – 43% over the $34.20 closing price of Company common stock on October 19, 2017. The October indication of interest noted, among other things, that the Sponsors would need to complete due diligence and arrange the necessary financing before being in a position to enter into definitive transaction documents. The October indication of interest stated that the Sponsors would only pursue a transaction with the full support of the Blackhawk board of directors and indicated that the Sponsors would permit the Company to engage in a customary post-signing go-shop process. It also requested that the Company enter into a three week exclusive negotiations period.

Over the next several days, Talbott Roche, the Chief Executive Officer of the Company, and William Y. Tauscher, the Executive Chairman of the Blackhawk board of directors of the Company, discussed the October indication of interest with members of the Blackhawk board of directors. Based on the feedback received from members of the Blackhawk board of directors, the Company notified Silver Lake Partners that it was willing to allow the Sponsors to conduct preliminary due diligence with respect to the Company. On October 25, 2017, the Company entered into an amendment to its May 22, 2017 confidentiality agreement with Silver Lake Partners to provide for the sharing of information with respect to a potential acquisition of the Company. That same day, the Company also entered into a customary confidentiality agreement with P2 Capital Partners, which replaced the confidentiality agreement entered into on May 25, 2017. However, the Company did not enter into an exclusivity agreement with the Sponsors.

On November 6, 2017, a special telephonic meeting of the Blackhawk board of directors was held, which was attended by representatives of Sandler O’Neill, and Wachtell, Lipton, Rosen & Katz (referred to in this proxy statement as “Wachtell Lipton”), the Company’s legal counsel. The Company’s senior management and representatives from Sandler O’Neill reviewed with the Blackhawk board of directors the terms of the October indication of interest. Members of management also provided an overview of the status of the Sponsors’ due diligence and discussions with the Sponsors regarding the potential timing and process for negotiating a potential transaction in the event that the Blackhawk board of directors determined to consider such a transaction. Among other things, management noted that the Sponsors had deferred any discussions regarding transaction price until after the preliminary due diligence review had been completed, and that Silver Lake had indicated that it would meet internally on November 20, 2017, to determine whether to submit an updated indication of interest to acquire the Company. Representatives from Sandler O’Neill discussed with the Blackhawk board of directors its preliminary financial analyses with respect to a potential transaction with the Sponsors. Representatives of Wachtell Lipton discussed the Blackhawk board of directors’ fiduciary duties in connection with its evaluation of the proposal. Management also noted that the Company was currently preparing its 2018 fiscal year plan, which would form the basis of management’s expectations for 2018 performance. After full discussion, the Blackhawk board of directors indicated that it supported management further investigating the potential transaction and determined to meet again during the week of November 20, 2017.

From October 30 through November 20, 2017, the Company provided preliminary diligence information to the Sponsors during in-person and telephonic meetings with members of the Company’s senior management team. During the management meetings, the Sponsors were provided with an overview of the Company’s business and operations and certain financial information and other preliminary due diligence materials regarding the Company.

On November 21, 2017, a special telephonic meeting of the Blackhawk board of directors was held, which was attended by representatives of Sandler O’Neill and Wachtell Lipton. The Company’s senior management discussed with the Blackhawk board of directors the status of the Company’s 2018 fiscal year plan and noted that the Company’s performance in 2018 was likely to be lower than expected levels, as the Company faced challenges in its U.S. retail sector that would limit organic growth, including as a result of the renewal of a contract with a key retail partner on terms that were significantly less favorable than the terms of the previous contract. Management also noted that the long-term forecast provided to the Sponsors did not reflect the revised expectations regarding the Company’s 2018 performance, but that management had provided the Sponsors with a general overview of potential factors affecting the Company’s future performance. Representatives from Sandler O’Neill also discussed with the Blackhawk board of directors its preliminary financial analysis of the proposed transaction using, at the Company’s direction, a forecasted range of estimated fiscal year 2018 Adjusted EBITDA of $240 million to $280 million (as further discussed in “— Certain Blackhawk Unaudited Prospective Financial Information”), which range reflected the challenges and uncertainties discussed with the board. Sandler O’Neill also discussed the potential risks and benefits of pursuing a transaction with the Sponsors or others or pursuing the Company’s strategy as a standalone public company.

Following the Blackhawk board meeting on November 21, 2017, Ms. Roche and Mr. Bingle discussed the transaction process. Mr. Bingle provided an update on the status of the Sponsors’ diligence review and Ms. Roche indicated that the Company would continue to engage with the Sponsors on due diligence. Mr. Bingle did not provide an updated valuation range. Between November 21 and December 11, 2017, the Sponsors continued to perform preliminary due diligence on the Company, including additional in-person and telephonic meetings with members of the Company’s senior management.

On December 4, 2017, a regularly scheduled meeting of the Blackhawk board of directors was held to review the Company’s preliminary fiscal year 2018 plan prepared by management, which was also attended by representatives of Sandler O’Neill and Wachtell Lipton. The Company’s senior management discussed with the Blackhawk board of directors a variety of topics relating to the Company’s strategic direction, including the competitive landscape facing the Company; trends, opportunities, challenges, and risks that the Company faced; the Company’s financial performance; and strategic initiatives. Representatives of Sandler O’Neill and representatives of Wachtell Lipton also discussed the current status of discussions with the Sponsors, including that the Sponsors had indicated that their diligence efforts were ongoing, and they were not yet ready to submit an updated indication of interest, and discussed both the opportunities and challenges of pursuing a transaction with the Sponsors at that time. Sandler O’Neill also provided an updated preliminary financial analysis with respect to the Company, which reflected management’s revised fiscal year 2018 Adjusted EBITDA estimate of $260 million (as further discussed in “— Certain Blackhawk Unaudited Prospective Financial Information”).

On December 10, 2017, representatives from Sandler O’Neill spoke with representatives of Silver Lake Partners regarding the Sponsors’ anticipated updated non-binding indication of interest. Silver Lake Partners indicated that, given information that the Company had provided to the Sponsors through due diligence, including regarding the Company’s financial performance and future prospects at a more detailed level than had previously been made available prior to the submission of the October indication of interest, the Sponsors expected to provide an updated indication of interest at a valuation range that was lower than the $47.00 – $49.00 valuation range set forth in the October indication of interest. Representatives from Sandler O’Neill indicated that based on its conversations with the Company, Sandler O’Neill believed that the Blackhawk board of directors might not support a transaction at a price per share that was significantly lower than the initial valuation range, and encouraged Silver Lake Partners to make its best possible offer.

On December 11, 2017, the Sponsors submitted a non-binding indication of interest in acquiring the Company (referred to in this proxy statement as the “December indication of interest”) at a valuation range of $44.00 – $45.00 per share of common stock, payable in cash, which represented a premium of approximately 28% – 31% over the $34.25 closing price of Company common stock on the last preceding business day, December 8, 2017. The December indication of interest stated that the decreased offer price was based on the results of the Sponsors’ due diligence review, including with respect to challenges that the Company expected to face in its U.S. end market and the Company’s lowered expectations for its performance over the next several years. The December indication of interest again requested that the Company enter into a three week exclusive negotiations period with the Sponsors.

On December 13, 2017, a special telephonic meeting of the Blackhawk board of directors was held, which representatives of Sandler O’Neill and Wachtell Lipton attended. Members of the Company’s senior management

team discussed the Company’s strategies and prospects as a stand-alone company, including the opportunities and challenges associated with pursuing the Company’s strategy as a public company. Representatives from Sandler O’Neill then reviewed the terms of the Sponsors’ revised proposal and discussed Sandler O’Neill’s financial analysis, which was based, at the Company’s direction, on the revised Adjusted EBITDA forecast of $260 million for the 2018 fiscal year. Representatives from Wachtell Lipton also discussed the fiduciary duties of the Blackhawk board of directors in considering the Sponsors’ proposal. The Blackhawk board of directors also discussed whether to solicit other proposals to acquire the Company and the benefits and risks inherent in undertaking an auction process, but ultimately determined not to do so because of the risk of losing the Sponsors’ proposal if the Company elected to solicit other proposals, the risk that the Sponsors might lower their proposal if the Company elected to solicit other proposals and little to no competitive bidding emerged, and the potential significant harm to the Company’s business if it became known that the Company was seeking to be sold (without assurance that a financially superior proposal would be made or consummated). The Blackhawk board of directors also considered the likelihood of receiving a proposal from another potential buyer and considered that any transaction agreement with the Sponsors would include a “go-shop” permitting the Company to solicit alternative proposals. After extensive discussion, the Blackhawk board of directors determined to authorize the Company’s management to continue with due diligence and enter into negotiations with the Sponsors of a definitive agreement, and Sandler O’Neill to engage in negotiations with respect to transaction price, subject in each case to further and final approval by the Blackhawk board of directors, if negotiations proved to be successful.

Following this meeting, representatives from Sandler O’Neill conveyed to representatives of Silver Lake Partners that the Company was willing to allow the Sponsors to undertake confirmatory due diligence and negotiate definitive transaction documentation, subject to reaching agreement on transaction price. The Company did not enter into an exclusivity agreement with the Sponsors.

Over the next several weeks, the Company made available to the Sponsors and their representatives additional due diligence materials and the Sponsors continued their due diligence review of the Company through both in-person and telephonic meetings with members of the Company’s management and legal teams and a review of documents provided by the Company in an electronic data room.

On January 2, 2018, Simpson Thacher & Bartlett LLP (referred to in this proxy statement as “Simpson Thacher”), counsel to Silver Lake Partners, distributed an initial draft of the proposed merger agreement to Wachtell Lipton. Consistent with the indications of interest, the proposed merger agreement included a 25-day go-shop period. It also included a two-tier Company termination fee of 3% and 4% of equity value, respectively (the 3% fee payable if the termination occurred due to a superior proposal during the go-shop period), an uncapped expense reimbursement payable in addition to the Company termination fee, and a reverse termination fee of 5% of equity value. It also provided that P2 Capital Partners, which held approximately 5% of the Company’s outstanding shares, would, if it determined to participate in a transaction, enter into a voting and support agreement to commit to vote such shares in favor of the deal.

On January 4, 2018, representatives from the Company, Sandler O’Neill and the Sponsors met to discuss preliminary transaction dollar volume results for the fourth quarter of the Company’s fiscal year 2017, as only transaction dollar volume results were available at the time of the January 4, 2018 meeting. The Company’s senior management noted that transaction dollar volume for the fourth quarter was slightly below expectations.

On January 4, 2018, representatives from Party A contacted Ms. Roche by email to indicate that Party A had studied the industries in which the Company operated and had an interest in pursuing discussions regarding the acquisition of the Company by Party A. Ms. Roche consulted with Sandler O’Neill and Wachtell Lipton and responded to Party A that she would follow-up with Party A shortly.

On January 8, 2018, Wachtell Lipton delivered a revised draft of the proposed merger agreement to Simpson Thacher. The revised draft provided, among other things, that an expense reimbursement would only be payable by the Company if the merger agreement was terminated because the Company stockholders did not approve the merger, and no other termination fee was payable. Such expense reimbursement would be capped at 1% of equity value.

On January 10, 2018, Simpson Thacher delivered a further revised draft of the merger agreement providing, among other things, that an expense reimbursement would be payable in addition to the Company termination fee, but capped the expense reimbursement at 1% of equity value.

On January 11, 2018, a special in-person meeting of the Blackhawk board of directors was held, which representatives of Wachtell Lipton and Sandler O’Neill attended. Representatives of Wachtell Lipton discussed the key terms of the draft merger agreement, including closing conditions, termination provisions, regulatory considerations and the structure of the go-shop period. Representatives of Wachtell Lipton also discussed with the Blackhawk board of directors its fiduciary duties under Delaware law in connection with the proposed transaction. Representatives from Sandler O’Neill provided an overview of the terms of the debt and equity commitments that were proposed to be obtained by the Sponsors in connection with the transaction and discussed Sandler O’Neill’s financial analysis, which was based, at the Company’s direction, on a further refined 2018 fiscal year plan indicating an Adjusted EBITDA range of $240 million to $250 million (as further discussed in “— Certain Blackhawk Unaudited Prospective Financial Information”). Representatives from Sandler O’Neill also provided an update on discussions with Silver Lake Partners regarding transaction price, including that Sandler O’Neill had conveyed to Silver Lake Partners that it believed that the Blackhawk board of directors would not be willing to accept a price that was less than $44.00 per share, the lower end of the range included in the December indication of interest, and encouraging Silver Lake Partners to make its best possible offer. The Blackhawk board of directors directed Sandler O’Neill and management to continue negotiating the transaction price, subject to further and final board approval. The Blackhawk board of directors also instructed management to finalize the remaining open points in the merger agreement, disclosure letter and ancillary documents. The Blackhawk board of directors also discussed the contact from Party A and considered whether or not to enter into discussions with Party A or provide them information at this time. The Blackhawk board of directors considered the likelihood that the Sponsors transaction could be executed within a few days, that Party A had not indicated a price, or even a range of prices, at which it would be willing to acquire the Company, and that, as a financial sponsor, it would likely need to do significant diligence in order to make such a proposal. The Blackhawk board of directors also considered that pursuing a transaction with Party A would divert management’s attention away from the potential transaction with the Sponsors and so could jeopardize the transaction with the Sponsors, that delaying the transaction with the Sponsors for the time required to provide Party A with sufficient information for Party A to formulate a proposal that included a price could result in the loss of the transaction with the Sponsors with no guaranty that Party A would be willing to enter into a transaction on terms equivalent to or better than those of the Sponsors, that the transaction with the Sponsors would include a “go-shop” which would permit post-signing discussions with Party A and that if the transaction with the Sponsors were not executed within a few days that the Blackhawk board of directors could enter discussions with Party A at that time. In light of these considerations, the Blackhawk board of directors decided against pursuing the contact with Party A.

During the next several days, the Sponsors and the Company and their respective counsels engaged in discussions and negotiations to complete due diligence and finalize the merger agreement, disclosure letter and related ancillary documents. Among other things, the parties agreed that an expense reimbursement capped at 0.25% of equity value would be payable by the Company if the merger agreement were terminated under specified circumstances and the Company termination fee were payable as a result of such termination, and that an expense reimbursement capped at 1% would be payable by the Company if the merger agreement were terminated because the Company stockholders did not approve the merger and no other termination fee were payable at that time.

During this period, Sandler O’Neill continued to negotiate the transaction price with representatives of Silver Lake Partners, with input and direction from members of the Blackhawk board of directors. During these discussions, at the direction of such board members, the representative of Sandler O’Neill proposed to Silver Lake Partners that the Sponsors should pay $46.00 per share. After lengthy discussions over several days, Sandler O’Neill and representatives of Silver Lake Partners negotiated a transaction price of $45.25, payable in cash, subject to Company board approval. This price was $0.25 more than the upper end of the range included in the December indication of interest and represented a 24% premium over Blackhawk’s closing share price of $36.50 on January 12, 2018 and a 29.3% premium over Blackhawk’s average closing share price during the 90 calendar days ended January 12, 2018. Representatives of Silver Lake Partners indicated that $45.25 per share was the highest price that the Sponsors would be willing to pay.

On the evening of January 14, 2018, a special telephonic meeting of the Blackhawk board of directors was held, which representatives of Wachtell Lipton and Sandler O’Neill attended. Representatives of Sandler O’Neill reported on the resolution of price negotiations with Silver Lake Partners. Sandler O’Neill then rendered its oral opinion to the Blackhawk board of directors, which was confirmed by delivery of a written opinion, dated January 14, 2018, that, as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the per share merger consideration of $45.25 was fair, from a financial point of view, to the holders of Blackhawk common stock (other than Parent, Merger Sub and any of Parent’s other direct or indirect wholly-owned subsidiaries).

Representatives of Wachtell Lipton also reviewed with the Blackhawk board of directors its fiduciary obligations, summarized the material terms of the proposed merger agreement and related ancillary documents and reported on the resolution of open issues during the course of negotiations with Simpson Thacher. After receiving management’s recommendation to approve the proposed transaction with the Sponsors on the terms set forth in the proposed merger agreement, the Blackhawk board of directors unanimously resolved to authorize and approve the proposed merger agreement.

On January 15, 2018, the respective parties to the merger agreement, voting and support agreement and limited guarantees executed those agreements, and the respective parties to the debt and equity commitment letters executed such letters.

On January 16, 2018, Blackhawk issued a press release announcing the proposed acquisition by the Sponsors.

The merger agreement provides that after the execution and delivery of the merger agreement and until one minute after 11:59 p.m. (New York City time) on February 9, 2018 (referred to in this proxy statement as the “go-shop period”), the Company, its subsidiaries and their respective representatives were permitted to initiate, solicit, facilitate and encourage the making of acquisition proposals, provide non-public information to, and engage in discussions or negotiations with, third parties in respect of acquisition proposals.

Shortly following the public announcement of the merger agreement, Party A contacted the Company to indicate that they were interested in engaging with the Company during the go-shop period. Party A executed a confidentiality agreement on January 17, 2018, and subsequently received confidential information from the Company and held several meetings, telephonically and in-person, with members of the Company’s senior management as well as with the Company’s financial advisor. On February 3, Party A indicated that the Company had responded to its diligence requests and that it would be in touch if it had additional questions. Party A did not contact the Company again or make an acquisition proposal prior to the expiration of the go-shop period. Following the expiration of the go-shop period, the Company notified Party A that the go-shop period had expired and, therefore, the Company was formally terminating discussions, and Party A acknowledged this termination.

Representatives of Sandler O’Neill also contacted eight strategic entities and five additional financial sponsors that it believed might have an interest in making a proposal to acquire the Company. None of these parties indicated that they were interested in engaging with the Company during the go-shop period. No third parties other than Party A indicated that they had any interest in engaging with the Company during the go-shop period or in entering into a confidentiality agreement to obtain non-public information with respect to the Company.

Reasons for the Merger; Recommendation of the Blackhawk Board of Directors

The Blackhawk board of directors, with the assistance of its financial and legal advisors, evaluated the merger agreement, the merger and the other transactions contemplated by the merger agreement, unanimously determined that the merger is fair to, and in the best interests of, the Company and its stockholders, and unanimously approved and declared advisable the merger agreement, the merger and the other transactions contemplated by the merger agreement. Accordingly, on January 14, 2018, the Blackhawk board of directors unanimously resolved to recommend that the stockholders of Blackhawk approve the adoption of the merger agreement and the other transactions contemplated thereby.

In the course of reaching its recommendation, the Blackhawk board of directors considered a number of positive factors relating to the merger agreement and the merger, each of which the Blackhawk board of directors believed supported its decision, including the following:

In the course of reaching its recommendation, the Blackhawk board of directors also considered certain risks and potentially adverse factors relating to the merger agreement and the merger, including:

The foregoing discussion of the information and factors considered by the Blackhawk board of directors includes the material factors considered by the Blackhawk board of directors but is not intended to be exhaustive and does not necessarily include all of the factors considered by the Blackhawk board of directors. In view of the complexity and variety of factors considered in connection with its evaluation of the merger agreement and the merger, the Blackhawk board of directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. The above factors are not presented in any order of priority. The explanation of the factors and reasoning set forth above contain forward-looking statements that should be read in conjunction with the section of this proxy statement entitled “Cautionary Statements Regarding Forward-Looking Information.”

The Blackhawk board of directors unanimously resolved to recommend that the stockholders of Blackhawk approve the merger and adopt the merger agreement based upon the totality of information it considered.

Certain Blackhawk Unaudited Prospective Financial Information

Except for quarterly and annual guidance, Blackhawk does not as a matter of course make public projections as to future performance, and is especially wary of making projections for extended periods, due to, among other reasons, the inherent difficulty of accurately predicting financial performance for future periods and the uncertainty of underlying assumptions and estimates. However, Blackhawk is including in this proxy statement a summary of certain limited unaudited prospective financial information for Blackhawk on a standalone basis, without giving effect to the merger (referred to in this proxy statement as the “Blackhawk Projections”), solely because such financial information was given to the Blackhawk board of directors, Sandler O’Neill and/or Parent for purposes of considering and evaluating the merger. Blackhawk advised the recipients of the Blackhawk Projections that its internal financial forecasts are subjective in many respects. The inclusion of the Blackhawk Projections should not be regarded as an indication that the Blackhawk board of directors, Sandler O’Neill, Blackhawk or its management, Parent, Merger Sub or any other recipient of this information considered, or now considers, it to be an assurance of the achievement of future results or an accurate prediction of future results, and they should not be relied on as such.

The Blackhawk Projections and the underlying assumptions upon which the Blackhawk Projections were based are subjective in many respects, and subject to multiple interpretations and frequent revisions attributable to the dynamics of Blackhawk’s industry and based on actual experience and business developments. The Blackhawk Projections, while presented with numerical specificity, reflect numerous assumptions with respect to company performance, industry performance, general business, economic, regulatory, market and financial conditions and other matters, many of which are difficult to predict, subject to significant economic and competitive uncertainties and beyond Blackhawk’s control. Multiple factors, including those described in the section of this proxy statement entitled “Cautionary Statements Regarding Forward-Looking Information” could cause the Blackhawk Projections or the underlying assumptions to be inaccurate. As a result, there can be no assurance that the Blackhawk Projections will be realized or that actual results will not be significantly higher or lower than projected. Because the Blackhawk Projections cover multiple years, such information by its nature becomes less reliable with each successive year. The Blackhawk Projections do not take into account any circumstances or events occurring after the date on which they were prepared, including the merger. Economic and business environments can and do change quickly, which adds an additional significant level of uncertainty as to whether the results portrayed in the Blackhawk Projections will be achieved. As a result, the inclusion of the Blackhawk Projections in this proxy statement does not constitute an admission or representation by Blackhawk, Sandler O’Neill or any other person that the information is material. Blackhawk made no representation to Parent, Merger Sub or any other person, in the merger agreement or otherwise, concerning the Blackhawk Projections. The summary of the Blackhawk Projections is not provided to influence Blackhawk stockholders’ decisions regarding whether to vote for the merger proposal or any other proposal. The financial projections should be evaluated, if at all, in conjunction with the historical financial statements and other information contained in Blackhawk’s public filings with the SEC.

The Blackhawk Projections were not prepared with a view toward public disclosure or toward compliance with United States generally accepted accounting principles (referred to in this proxy statement as “GAAP”), published

guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Neither Deloitte & Touche LLP (referred to in this proxy statement as “Deloitte”), Blackhawk’s independent registered public accounting firm, nor any other accounting firm, has examined, compiled or performed any procedures with respect to the Blackhawk Projections, and accordingly, Deloitte does not express an opinion or any other form of assurance with respect thereto. The Deloitte report incorporated by reference in this proxy statement relates to Blackhawk’s historical financial information. It does not extend to the prospective financial information contained herein and should not be read to do so.

The Blackhawk Projections

Blackhawk’s management prepared non-public, unaudited financial forecasts with respect to Blackhawk’s business, as a standalone company, for fiscal years 2017 through 2020, which are referred to as the “Initial Projections.”

The Initial Projections were based on the information contained in Blackhawk’s financial model, which was prepared by Blackhawk’s management during the Summer of 2017 from financial models used in connection with its annual internal planning processes, and were provided to Sandler O’Neill, the Sponsors and the Blackhawk board of directors in late October and early November 2017.

In connection with the November 21, 2017 meeting of the Blackhawk board of directors, Blackhawk’s management prepared a revised non-public, unaudited financial forecast with respect to Blackhawk’s business, as a standalone company, for fiscal year 2018, which showed a range of estimated performance and is referred to as the “November Estimate Range.” The November Estimate Range was provided to Sandler O’Neill and the Blackhawk board of directors.

In December 2017, in connection with its annual internal planning processes, Blackhawk’s management prepared a revised non-public, unaudited financial forecast with respect to Blackhawk’s business, as a standalone company, for fiscal year 2018, which is referred to as the “Preliminary 2018 Plan.” The Preliminary 2018 Plan was provided to Sandler O’Neill, the Blackhawk board of directors and the Sponsors.

In January 2018, subsequent to the end of the Company’s 2017 fiscal year and a review of the Company’s preliminary results for the fourth quarter of 2017, Blackhawk’s management prepared a revised non-public, unaudited financial forecast with respect to Blackhawk’s business, as a standalone company, for fiscal year 2017 and a range of estimated performance for fiscal year 2018, which are referred to as the “Revised Projections.” The Revised Projections were provided to the Blackhawk board of directors, Sandler O’Neill and the Sponsors. Blackhawk’s management directed Sandler O’Neill to use the Revised Projections, rather than the Initial Projections, the November Estimate Range or the Preliminary 2018 Plan, for purposes of its opinion described in the section of this proxy statement entitled “The Merger — Opinion of Blackhawk’s Financial Advisor — Opinion of Sandler O’Neill & Partners, L.P.” based on management’s view that the Revised Projections were significantly more likely to reflect the future business performance of the Company on a standalone basis than would the Initial Projections, the November Estimate Range or the Preliminary 2018 Plan.

The following is a summary of the Blackhawk Projections:

Summary of the Initial Projections
(dollars in millions except per share amounts)

Summary of the November Estimate Range
(dollars in millions)

Summary of the Preliminary 2018 Plan
(dollars in millions)

Summary of the Revised Projections
(dollars in millions)

Reconciliations of net income to Adjusted EBITDA, total operating revenues to Adjusted Operating Revenues, net income to Adjusted Net Income and diluted earnings per share to Adjusted Earnings Per Share are not provided. There is inherent difficulty and uncertainty in estimating or predicting the various components of each of net income, net cash provided by operating activities, total operating revenues and diluted earnings per share, which components could significantly impact that financial measure. In addition, when planning, forecasting and analyzing future periods, the Company does so primarily on a non-GAAP basis without preparing a GAAP analysis, as that would require estimates for various reconciling items that would be difficult to predict with reasonable accuracy. As a result, the Company does not believe that a GAAP reconciliation to forward-looking non-GAAP financial measures would provide meaningful supplemental information about the Company’s outlook.

The Blackhawk Projections do not take into account the possible financial and other effects on Blackhawk of the merger and do not attempt to predict or suggest future results following the merger. The Blackhawk Projections do not give effect to the merger, including the impact of negotiating or executing the merger agreement, the expenses that may be incurred in connection with completing the merger, the effect on Blackhawk of any business or strategic decision or action that has been or will be taken as a result of the merger agreement having been executed, or the effect of any business or strategic decisions or actions that would likely have been taken if the merger agreement had not been executed, but that were instead altered, accelerated, postponed or not taken in anticipation of the merger. Further, the Blackhawk Projections do not take into account the effect on Blackhawk of any possible failure of the merger to occur.

For the foregoing reasons, and considering that the special meeting will be held several months after the Blackhawk Projections were prepared, as well as the uncertainties inherent in any forecasting information, readers of this proxy statement are cautioned not to place unwarranted reliance on the Blackhawk Projections set forth above. No one has made or makes any representation to any investor or stockholder regarding the information included in the Blackhawk Projections. Blackhawk urges all Blackhawk stockholders to review its most recent SEC filings for a description of its reported financial results. See the section of this proxy statement entitled “Where You Can Find Additional Information.”

In addition, except as described above, the Blackhawk Projections have not been updated or revised to reflect information or results after the date the Blackhawk Projections were prepared or as of date of this proxy statement, and except as required by applicable securities laws, Blackhawk does not intend to update or otherwise revise the Blackhawk Projections or the specific portions presented to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions are shown to be in error.

Opinion of Blackhawk’s Financial Advisor

Pursuant to an engagement letter dated December 13, 2017, Blackhawk retained Sandler O’Neill to act as an independent financial advisor to the Blackhawk board of directors in connection with Blackhawk’s consideration of a possible business combination. Sandler O’Neill is a nationally recognized investment banking firm whose principal business specialty is financial institutions. In the ordinary course of its investment banking business, Sandler O’Neill is regularly engaged in the valuation of financial technology companies and their securities in connection with mergers and acquisitions and other corporate transactions.

Sandler O’Neill acted as an independent financial advisor to Blackhawk in connection with the proposed transaction and participated in certain of the negotiations leading to the execution of the merger agreement. At the January 14, 2018 meeting at which the Blackhawk board of directors considered and discussed the terms of the merger agreement and the merger, Sandler O’Neill delivered to the Blackhawk board of directors its oral opinion, which was subsequently confirmed in writing on January 14, 2018, to the effect that, as of such date, the per share merger consideration was fair, from a financial point of view, to the holders of Blackhawk common stock (other than Parent, Merger Sub and any of Parent’s other direct or indirect wholly-owned subsidiaries). The full text of Sandler O’Neill’s opinion is attached as Annex B to this proxy statement. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler O’Neill in rendering its opinion. The description of the opinion set forth below is qualified in its entirety by reference to the full text of the opinion. Holders of Blackhawk common stock are urged to read the entire opinion carefully in connection with their consideration of the merger agreement and the merger.

Sandler O’Neill’s opinion speaks only as of the date of the opinion. Sandler O’Neill’s opinion is directed to the Blackhawk board of directors in connection with its consideration of the merger agreement and the merger and does not constitute a recommendation to any stockholder of Blackhawk as to how any such stockholder should vote at any meeting of shareholders called to consider and vote upon the adoption of the merger agreement and approval of the merger. Sandler O’Neill’s opinion is directed only to the fairness, from a financial point of view, of the per share merger consideration to the holders of Blackhawk common stock (other than Parent, Merger Sub. and any of Parent’s other direct or indirect wholly-owned subsidiaries) and does not address the underlying business decision of Blackhawk to engage in the merger, the form or structure of the merger or any other transactions contemplated in the merger agreement, the relative merits of the merger as compared to any other alternative transactions or business strategies that might exist for Blackhawk or the effect of any other transaction in which Blackhawk might engage. Sandler O’Neill also did not express any opinion as to the fairness of the amount or nature of the compensation to be received in the merger by any officer, director or employee of Blackhawk, or any class of such persons, if any, relative to the amount of compensation to be received in the merger by any other stockholder. The opinion was approved by Sandler O'Neill's fairness opinion committee.

In connection with its opinion, Sandler O’Neill reviewed and considered, among other things:

Sandler O’Neill also discussed with certain members of the senior management of Blackhawk the business, financial condition, results of operations and prospects of Blackhawk.

In performing its review, Sandler O’Neill relied upon the accuracy and completeness of all of the financial and other information that was available to and reviewed by Sandler O’Neill from public sources, that was provided to Sandler O’Neill by Blackhawk or its representatives or that was otherwise reviewed by Sandler O’Neill and Sandler O’Neill assumed such accuracy and completeness for purposes of rendering its opinion without any independent verification or investigation. Sandler O’Neill relied on the assurances of the senior management of Blackhawk that they were not aware of any facts or circumstances that would make any of such information inaccurate or misleading. Sandler O’Neill was not asked to and did not undertake an independent verification of any of such information and Sandler O’Neill did not assume any responsibility or liability for the accuracy or completeness thereof. Sandler O’Neill did not make an independent evaluation or perform an appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of Blackhawk or any of its affiliates or subsidiaries, nor was Sandler O’Neill furnished with any such evaluations or appraisals. Sandler O’Neill rendered no opinion or evaluation on the collectability of any assets of Blackhawk or any of its affiliates or subsidiaries.

In preparing its analyses, Sandler O’Neill used internal estimated adjusted EBITDA for Blackhawk for the year ending December 31, 2017 and adjusted EBITDA range for Blackhawk for the year ending December 31, 2018, all as provided by the senior management of Blackhawk. With respect to the foregoing information, the senior management of Blackhawk confirmed to Sandler O’Neill that such information reflected the best estimates then available to the management of Blackhawk of the future financial performance of Blackhawk and Sandler O’Neill assumed that such performance would be achieved. Sandler O’Neill expressed no opinion as to such estimates, or the assumptions on which they were based. Sandler O’Neill assumed that there had been no material change in Blackhawk’s or any of its affiliates’ or subsidiaries’ assets, financial condition, results of operations, business or prospects since the date of the most recent financial statements made available to Sandler O’Neill. Sandler O’Neill assumed in all respects material to its analysis that Blackhawk would remain as a going concern for all periods relevant to its analyses.

Except for quarterly and annual guidance, Blackhawk does not as a matter of course make public projections as to future performance, and is especially wary of making projections for extended periods, due to, among other reasons, the inherent difficulty of accurately predicting financial performance for future periods and the uncertainty of underlying assumptions and estimates. The Blackhawk Projections were not prepared with a view toward public disclosure or toward compliance with GAAP, published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The Blackhawk Projections, while presented with numerical specificity, reflect numerous assumptions with respect to company performance, industry performance, general business, economic, regulatory, market and financial conditions and other matters, many of which are difficult to predict, subject to significant economic and competitive uncertainties and beyond Blackhawk’s control. Multiple factors, including those described in the section of this proxy statement entitled “Cautionary Statements Regarding Forward-Looking Information,” could cause the Blackhawk Projections or the underlying assumptions to be inaccurate. As a result, there can be no assurance that the

Blackhawk Projections will be realized or that actual results will not be significantly higher or lower than projected. For more information regarding the use of the Blackhawk Projections, see the section of this proxy statement entitled “The Merger — Certain Blackhawk Unaudited Prospective Financial Information.”

Sandler O’Neill also assumed, with Blackhawk’s consent, that (1) each of the parties to the merger agreement would comply in all material respects with all material terms and conditions of the merger agreement and all related agreements, that all of the representations and warranties contained in such agreements were true and correct in all material respects, that each of the parties to such agreements would perform in all material respects all of the covenants and other obligations required to be performed by such party under such agreements and that the conditions precedent in such agreements were not and would not be waived, (2) in the course of obtaining the necessary regulatory or third party approvals, consents and releases with respect to the merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on Blackhawk, Parent, Merger Sub, the merger or any related transaction, and (3) the merger and any related transaction would be consummated in accordance with the terms of the merger agreement without any waiver, modification or amendment of any material term, condition or agreement thereof and in compliance with all applicable laws and other requirements. Sandler O’Neill expressed no opinion as to any of the legal, accounting or tax matters relating to the merger or any other transactions contemplated in connection therewith.

Sandler O’Neill’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Sandler O’Neill as of, the date thereof. Events occurring after the date thereof could materially affect Sandler O’Neill’s opinion. Sandler O’Neill has not undertaken to update, revise, reaffirm or withdraw its opinion or otherwise comment upon events occurring after the date thereof.

In rendering its opinion, Sandler O’Neill performed a variety of financial analyses. The summary below is not a complete description of all the analyses underlying Sandler O’Neill’s opinion rendered to the Blackhawk board of directors on January 14, 2018 or the presentation made by Sandler O’Neill to Blackhawk’s board of directors on such date, but is a summary of the material analyses performed and presented by Sandler O’Neill. The summary includes information presented in tabular format. In order to fully understand the financial analyses, these tables must be read together with the accompanying text. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Sandler O’Neill believes that its analyses must be considered as a whole and that selecting portions of the factors and analyses to be considered without considering all factors and analyses, or attempting to ascribe relative weights to some or all of such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. The order of analyses does not represent the relative importance or weight given to those analyses by Sandler O’Neill. Also, no company included in Sandler O’Neill’s comparative analyses described below is identical to Blackhawk and no transaction is identical to the merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or merger transaction values, as the case may be, of Blackhawk and the companies to which they were compared. In arriving at its opinion, Sandler O’Neill did not attribute any particular weight to any analysis or factor that it considered. Rather, Sandler O’Neill made qualitative judgments as to the significance and relevance of each analysis and factor. Sandler O’Neill did not form an opinion as to whether any individual analysis or factor (positive or negative) considered in isolation supported or failed to support its opinion; rather, Sandler O’Neill made its determination as to the fairness of the per share merger consideration on the basis of its experience and professional judgment after considering the results of all of its analyses taken as a whole.

In performing its analyses, Sandler O’Neill also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which are beyond the control of Blackhawk and Sandler O’Neill. The analyses performed by Sandler O’Neill are not necessarily indicative of actual values or future results, both of which may be significantly more or less favorable than suggested by such analyses. Sandler O’Neill prepared its analyses solely for purposes of rendering its opinion and provided such analyses to the Blackhawk board of directors at its January 14, 2018 meeting. Estimates on the values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and actual values may be materially different. Accordingly, Sandler O’Neill’s analyses do not necessarily reflect the value of Blackhawk common stock or the price at which Blackhawk

common stock may be sold at any time. The analyses of Sandler O’Neill and its opinion were among a number of factors taken into consideration by the Blackhawk board of directors in making its determination to approve the merger agreement and the analyses described below should not be viewed as determinative of the decision of the Blackhawk board of directors or management with respect to the fairness of the merger.

Summary of Proposed Per Share Merger Consideration and Implied Transaction Metrics

Sandler O’Neill reviewed the financial terms of the proposed merger. Pursuant to the terms of the merger agreement, upon the effective time, each share of Blackhawk common stock issued and outstanding immediately before the effective time (other than certain shares specified in the merger agreement) will be converted into the right to receive $45.25 per share in cash, without interest. Sandler O’Neill calculated a transaction value of approximately $2,724 million, assuming 60.2 million fully diluted shares of Blackhawk common stock outstanding, comprised of 55.8 million shares of common stock outstanding as of January 12, 2018, 2.4 million options outstanding at a weighted average strike price of $28.04, 2.8 million RSUs (inclusive of anticipated first quarter 2018 equity grant), 0.1 million PSUs, and 0.6 million warrants (assumed to be exercised upon announcement). Sandler O’Neill calculated a total enterprise value of approximately $3,539 million, assuming $815.0 million in net debt, as provided by Blackhawk management. For purposes of this section, enterprise value is referred to as “EV,” last twelve months is referred to as “LTM,” and next twelve months is referred to as “NTM.” Sandler O’Neill calculated the following transaction pricing multiples based on the per share merger consideration:

Note: Adjusted EBITDA reflects EBITDA plus adjustments for the impact of business units held for sale, stock based compensation, acquisitions-related employee compensation expenses, revenue adjustments from purchase accounting, goodwill and other asset impairment charges, the change in the fair value of contingent consideration, the net gain on the transaction to transition Blackhawk’s program-managed GPR business to another program manager, the gain on the sale of Blackhawk’s member interest in Visa Europe and legal and accounting related costs incurred in conjunction with the sale of Grass Roots Meetings & Events Limited; Adjusted Net Income reflects GAAP Net Income adjusted for the above adjustments as well as the addition of acquired intangibles on a tax effected basis.

Note: 2017 Adjusted EBITDA estimate and 2018 estimated Adjusted EBITDA range exclude results from Grass Roots Meetings & Events Limited and Cardpool, Inc.

Stock Trading History

Sandler O’Neill reviewed the history of the publicly reported trading price from S&P Global Market Intelligence of Blackhawk common stock for the three-year period ended January 12, 2018. Sandler O’Neill then compared the relationship between the movements in the price of Blackhawk common stock to the Blackhawk Peer Group as well as certain stock indices.

Blackhawk’s Three-Year Stock Performance

Comparable Company Analysis

Sandler O’Neill used publicly available information, including from S&P Global Market Intelligence, to compare selected financial information for Blackhawk with a group of companies selected by Sandler O’Neill. The Blackhawk peer group consisted of twelve comparable prepaid and payment processing companies (referred to in this proxy statement as the “Blackhawk Peer Group”). The Blackhawk Peer Group consisted of the following companies:

The analysis compared publicly available financial information for Blackhawk with the corresponding data for the Blackhawk Peer Group as of January 12, 2018. The table below sets forth the data for Blackhawk and the median, mean, low and high data for the Blackhawk Peer Group.

Comparable Company Analysis

Note: Market data as of market close on January 12, 2018.

Note: 2017 Estimated EBITDA, 2018 Estimated EBITDA, 2017 Estimated Earnings, and 2018 Estimated Earnings reflect Wall Street median consensus analyst estimates; assumes $815.0 million in net debt as provided by Blackhawk management.

Analysis of Precedent Merger Transactions

Sandler O’Neill reviewed a global group of recent merger and acquisition transactions consisting of comparable payments / cards, loyalty and ecommerce solutions transactions announced after September 30, 2015 (referred to in this proxy statement as the “Precedent Transactions”).

The Precedent Transactions group was composed of the following eleven transactions:

Using the latest publicly available information, including from Bloomberg and S&P Global Market Intelligence, prior to the announcement of the relevant transaction, Sandler O’Neill reviewed the following transaction metrics:

enterprise value to last twelve months EBITDA, enterprise value to next twelve months EBITDA, transaction price to last twelve months net income, transaction price to next twelve months net income, one-day market premium, one-week market premium and one-month market premium. Sandler O’Neill compared the indicated transaction metrics for the merger to the median, mean, low and high metrics of the Precedent Transactions group.

Note: 2017 Adjusted EBITDA estimate and 2018 estimated Adjusted EBITDA range exclude results from Grass Roots Meetings & Events Limited and Cardpool, Inc.

Public Company Premium Analysis

Sandler O’Neill reviewed a group of merger and acquisition transactions involving public companies across all industries in order to compare the market premium in the proposed merger to similarly sized transactions. The group of transactions included ninety-two transactions across all industries that were announced after January 1, 2016 and closed before January 14, 2018. These transactions also included public targets with 100% cash consideration and deal value at announcement between $1,500 million and $3,500 million (referred to in this proxy statement as the “All Industries Precedent Transactions”). Sandler O’Neill then compared the market premium in the proposed merger to the group of merger and acquisition transactions described above.

Premium to Target Spot Price