Crocs to Acquire Hey Dude Footwear Brand
Crocs announced today it is acquiring the fast growing Hey Dude footwear brand, a brand that retailers tell us sells like crazy.
Crocs is paying $2.5 billion for Hey Dude, which will record $570 million in revenue in 2021. The valuation multiple is less than 15 times EV/EBITDA according to Crocs.
Other Hey Dude facts:
- 95% of the brand’s revenue comes from the U.S. market, even though the brand was founded in Italy
- Digital makes up 43% of sales
- Crocs believes Hey Dude can become a $1 billion brand by 2024.
- The deal is expected to close in Q1.
Here is the official press release:
Crocs Inc. to Acquire Casual Footwear Brand HEYDUDE
Creating A Leader in Global Casual Footwear
Transaction Expected to be Immediately Accretive to 2022 Revenue Growth, Operating Margin and Earnings
BROOMFIELD, Colo., Dec. 23, 2021 /PRNewswire/ — Crocs, Inc. (NASDAQ: CROX), a world leader in innovative casual footwear for women, men, and children, today 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, Chief Executive Officer of 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 Chief Executive Officer, 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 Chief Financial Officer, 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 Mr. 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. Alessandro Rosano, founder of HEYDUDE, will continue to lead innovative product development as Strategic Advisor and Creative Director. As part of this transaction, Rick Blackshaw was hired to join HEYDUDE as Executive Vice President and Brand President. Mr. 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 Vice President / General Manager of the Chuck Taylor division of Converse. Mr. Blackshaw will be a member of the 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, investors.crocs.com.
Citi is serving as 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.
About Crocs, Inc.
Crocs, Inc. (Nasdaq: CROX) is a world leader in innovative casual footwear for women, men, and children, combining comfort and style with a value that consumers know and love. The vast majority of shoes within Crocs’ collection contains Croslite™ material, a proprietary, molded footwear technology, delivering extraordinary comfort with each step.
In 2021, Crocs declares that expressing yourself and being comfortable are not mutually exclusive. To learn more about Crocs or our global Come As You Are™ campaign, please visit www.crocs.com or follow @Crocs on Facebook, Instagram, and Twitter.
HEYDUDE™ designs comfortable, versatile and accessible footwear and accessories. Founded in Italy in 2008, HEYDUDE puts tireless attention to detail and a passion for impeccable craftsmanship into every pair of HEYDUDE shoes. HEYDUDE believes its innovative, ultra-light comfort and casual yet versatile style are a winning combination. Please visit www.heydudeshoes.com or follow @heydudeshoes on Facebook and Instagram, and @heydudeshoesUSA on Twitter.