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Crocs To Acquire Heydude

Crocs Inc. announced that it has entered into a definitive agreement to acquire Heydude, a privately-owned casual footwear brand, for $2.5 billion.

“With the acquisition of Heydude, we are thrilled to add another high-growth, highly profitable brand to our portfolio,” said Andrew Rees, CEO, Crocs. “We believe Heydude’s casual, comfortable and lightweight products are aligned to long-term consumer trends and are a perfect fit for Crocs. We intend to leverage our global presence, best-in-class marketing and scale infrastructure to build upon Heydude’s strong foundation and create significant shareholder value. We truly admire the business that founder Alessandro Rosano has built and are honored to welcome the Heydude team to Crocs.”

Heydude founder and CEO, Alessandro Rosano said, “We founded Heydude in Italy in 2008, to develop comfortable, versatile and accessible footwear. We are proud of the brand we built and are honored to become a part of Crocs, a company perfectly positioned to take Heydude to the next level. We have long admired the Crocs business and are excited to have them bring Heydude’s comfort, craftsmanship, and style to consumers globally.”

Crocs Executive Vice President and CFO, Anne Mehlman said, “Heydude has experienced incredible growth in revenue and profits over the past few years. Heydude is expected to be immediately accretive to our high revenue growth, industry-leading operating margins and earnings. We expect the combined business to generate significant free cash flow, enabling us to quickly deleverage while investing to support future growth. We are excited about the combination and are confident in our ability to deliver long-term shareholder value.”

The purchase price of $2.5 billion, subject to customary closing adjustments, will be funded by $2.05 billion in cash and $450 million in Crocs shares issued to Rosano based on the average of the daily volume-weighted average price of our stock for the 20 days immediately prior to the signing date. We expect to enter into a $2.0 billion Term Loan B Facility and borrow $50 million under the company’s existing Senior Revolving Credit Facility to fund the cash consideration. The transaction is expected to close in the first quarter of 2022, subject to customary closing conditions and regulatory approval.

Upon completion of the transaction, Heydude will operate as a standalone division. Rosano will continue to lead product development as a strategic advisor and creative director. As part of this transaction, Rick Blackshaw was hired to join Heydude as executive vice president and brand president. Blackshaw brings over 25 years of footwear experience and most recently served as the CEO at CCM Hockey and previously held positions as the President of Sperry, President of Keds and VP/GM of the Chuck Taylor division of Converse. Blackshaw will be a member of Crocs’ Executive Leadership Team and report to CEO Andrew Rees.

Additional details about the transaction are contained in a presentation on the Investor Relations section of the Crocs’ website and here.

Citi is serving as the financial advisor to Crocs, with Perkins Coie LLP and Bird & Bird as legal advisors. LVC Asia Pacific, Ltd. is serving as financial advisor to Heydude, with Chiomenti, Deacons, Cozen O’Connor, Sullivan & Cromwell, and Croon Law Group, LLC as legal advisors.

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