Seeking Alpha

Crocs CEO to retire as Blackstone invests $200M

  • Blackstone (BX) has agreed to pay $200M to acquire a 13% stake in Crocs (CROX), the latter said late yesterday, adding that CEO John McCarvel will retire at the end of April.
  • Blackstone will receive newly issued preferred equity that it can convert into common shares at $14.50 each vs Friday's close of $13.33, and which will have a cash dividend rate of 6%. The private-equity firm will also receive two board seats.
  • Crocs will use the proceeds to help pay for a $350M repurchase program; along with Blackstone's investment, the buyback will reduce the footwear maker's publicly traded common stock float by 30%.
  • Blackstone's investment comes after Crocs' Q3 profit dropped 71% to $13M on revenue of $288.5M. The company expects Q4 earnings to be at the low end of its guidance range for a loss per share $0.20-0.23 - meaning the loss will be greater - and for revenue of $220-225M. Analysts predict $0.19 and $222.25M respectively. Crocs will also take charges of $47-52M in Q4 and may need to carry out further restructuring in 2014. (PR)
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Comments (2)
  • Michael Bryant
    , contributor
    Comments (5584) | Send Message
     
    Someone here said she loved (CROX). And I just saw my neighbor wearing those Crocbands.
    30 Dec 2013, 07:36 AM Reply Like
  • positivethoughts
    , contributor
    Comments (1890) | Send Message
     
    $1.5 billion dollars valuation for $13 million in current earnings is quite risky. The 6% dividend is nice, but will Blackstone be eventually funding their own divident payout when they might be asked to further keep CROCS afloat by extending them more cash in the future? A company that has a massive drop in profits and is expected to show losses going forward, isnt such a good place to spend your investing dollars, imho.
    30 Dec 2013, 10:20 AM Reply Like
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