Crocs makes its largest acquisition with $2.5B Heydude buy

BROOMFIELD — Crocs Inc. (Nasdaq: CROX) has inked a deal to acquire casual footwear brand Heydude for $2.5 billion, the Broomfield clog giant’s largest acquisition to date. 

The cash and stock deal is expected to close in early 2022, according to a disclosure filed with the U.S. Securities and Exchange Commission.

“With the acquisition of Heydude, we are thrilled to add another high-growth, highly profitable brand to our portfolio,” Crocs CEO Andrew Rees said in a prepared statement. “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 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.”

More than $2 billion of the total purchase price will be paid in cash, which Crocs is financing with a new loan.

Wall Street reacted warily to the deal Thursday, and Crocs’ stock price shed 11.63% on the day.

On a conference call with investors and analysts Thursday, Crocs officials were bullish on Heydude’s ability to quickly add revenue to the company’s balance sheet, predicting $1 billion in sales from the Heydude standalone division by 2024.

“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,” Crocs chief financial officer Anne Mehlman said in a statement. “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.”

Crocs has set an aggressive sales target for the overall organization, aiming for $5 billion in revenue by 2026.

© 2021 BizWest Media LLC

on Facebook on LinkedIn