Crocs shares crashed 11.63% to five-month lows today after the company bought Heydude, an Italian casual footwear company.
$CROX dropped as investors worry about how the shoe company will fund the $2.5 billion acquisition. Crocs will take out a $2 billion loan and a $50 million credit under an existing revolving facility with its bankers to cover the $2.05 billion cash portion of the deal. 😬 Crocs will also issue the Heydude founder and CEO, Alessandro Rosano, $450 million in $CROX shares.
The deal is anticipated to close in Q1 of 2022. Once the acquisition is completed, Heydude will function as a separate entity with Rosano continuing to head the firm.
Crocs CEO Andrew Rees stated: “With the acquisition of Heydude, we are thrilled to add another high-growth, highly profitable brand to our portfolio. We believe Heydude’s casual, comfortable, and lightweight products are aligned to long-term consumer trends and are a perfect fit for Crocs.”
$CROX is still up 97.6% YTD.