Crocs, Inc. (NASDAQ: CROX) disclosed that it has bought HEYDUDE which is a privately-owned casual footwear brand, for $2.5 billion. Since HEYDUDE inception in Italy in 2008, it was specialized in making comfortable, adaptable, and accessible footwear. Crocs stated that with the acquisition of HEYDUDE, it has included another high-growth, highly profitable brand in its portfolio.
Crocs contemplate that HEYDUDE's casual, comfortable, and lightweight products are lined up to long-term consumer trends and are a perfect fit for Crocs. The company is planning to leverage its global presence, best-in-class marketing, and scale infrastructure to build upon HEYDUDE's strong base and create substantial shareholder value.
Furthermore, CROX stated that HEYDUDE has experienced tremendous growth in revenue and profits over the past few years. HEYDUDE is likely to be immediately profitable to its high revenue growth, industry-leading operating margins, and earnings. Moreover, the company is anticipating that the merged business will generate significant free cash flow, which will allow the company to quickly deleverage while investing to support future growth.
Transaction Overview
Furthermore, as per the agreement, the purchase price of $2.5 billion will be financed by $2.05 billion in cash and $450 million in Crocs shares issued to Mr. Rosano based on the average of the daily volume-weighted average price of its stock for the 20 days immediately before the signing date.
The company is anticipating entering into a $2.0 billion Term Loan B Facility and borrowing $50 million under the Company's current Senior Revolving Credit Facility to fund the cash consideration. The transaction is likely to execute in the first quarter of 2022, depending on customary closing conditions and regulatory approval.