Private equity firm Silver Lake and New York-based hedge fund P2 Capital Partners has agreed to acquire Blackhawk Network, a company that operates in the prepaid, gift card and payments industries, in an all-cash deal worth nearly $3.5bn including debt.

The transaction involves a payment of $45.25 per share, with around $1.7bn equity commitment from Silver Lake. After completion of the deal, Blackhawk will be led as a private entity by the existing team.

Blackhawk provides physical and digital gift card, prepaid payments, reward and incentive technologies and solutions for more than 1,000 brands across more than 244,000 retail distribution outlets and online channels.

Blackhawk Network CEO and president Talbott Roche said: “This transaction delivers immediate benefits and significant value to our stockholders.

“Silver Lake and P2 Capital Partners bring the long-term focus, financial resources and technology expertise that can enable us to accelerate growth initiatives globally and reach the company’s full potential.”

Subject to customary closing conditions and regulatory approvals, the acquisition is set to close in mid-2018.

Under the terms of the agreement, Blackhawk will be able to solicit, receive, evaluate and enter into negotiations for any other proposals through 9 February 2018.