Crocs raises funds from Blackstone

Crocs has announced that it has closed the previously announced investment from a fund affiliated with Blackstone

to purchase 200 million dollars of newly issued series A convertible preferred stock. In connection with the closing of the transaction, the Crocs Board of Directors appointed two new members and accepted the resignation of two current board members. Crocs intends to use the net proceeds from the preferred stock, as well as excess cash, to fund the previously announced 350 million dollars stock repurchase authorization approved by the Crocs Board of Directors.

As a condition of its investment, Blackstone is entitled to nominate two out of eight seats on the Crocs Board of Directors. As a result, Stephen Cannon and Jeffrey Margolis have resigned from the company's board and Blackstone's two nominees, Prakash Melwani and Gregg Ribatt have replaced them. Melwani is currently a Senior Managing Director at Blackstone and Chief Investment Officer of the firm's private equity group; Ribatt most recently served as the President and Chief Executive Officer of Collective Brands Performance + Lifestyle Group.

“The willingness of Steve and Jeff to resign voluntarily from our board in order to accommodate new directors associated with Blackstone's investment demonstrates their professionalism and commitment to Crocs,” said Thomas J. Smach, Crocs Chairman, adding, “We welcome Prakash and Gregg to our board and are confident they will add a great deal of value through their branded consumer goods, retail, and financial experience. Although Blackstone's investment will represent approximately 13 percent ownership at closing, we believe our company, shareholders, and employees will benefit from 100 percent of Blackstone's focus, global resources, and expertise.

The Preferred Stock has a 6.0 percent cash dividend rate and is convertible into shares of common stock at a conversion price of 14.50 dollars per share. This conversion price represents a 9 percent premium to the closing price of 13.33 dollars per share on December 27, 2013, the last trading day before the announcement of the transaction, and a 10 percent premium to the 30-day average closing price of 13.19 dollars per share.

Moelis & Company LLC acted as financial advisor and Perkins Coie LLP acted as legal counsel for Crocs. Piper Jaffray & Co. and Macquarie acted as financial advisors and Simpson Thacher & Bartlett LLP acted as legal counsel for Blackstone in connection with the investment.