Blackstone (BX) to Acquire 13 Percent Stake in Crocs
Shares of The Blackstone Group L.P. (BX) closed up +0.13 or +0.42 percent on Friday to $31.35 per share. The company announced over the weekend that it would be purchasing a $200 million stake in Crocs, Inc. (CROX). Crocs stock closed at $13.33 per share, up +0.03 or +0.23 percent on Friday.
The deal for the 13 percent stake in Crocs will be done through a newly issued series A convertible preferred stock with Crocs revising a $350 million stock repurchase program approved by its board. The repurchase program along with the sale to Blackstone will eventually reduce Crocâ s common stock float by 30 percent.
New York City based The Blackstone Group L.P. is a transnational private equity, asset management and investment banker and the largest alternative investment company in the world. The group specializes in managing private equity and hedge fund investment strategies and had revenue of more than $3.6 billion in 2012. Blackstoneâ s foreign offices are located in Beijing, Dubai, Dusseldorf, London, Mumbai, Paris, Shanghai and Sydney. Niwot, Colorado based Crocs, Inc. is a shoe manufacturer best known for producing shoes with a foam resin called Croslite, which forms itself around the wearerâ s feet and has medical benefits according to some podiatrists. The foam clog design was acquired from a Canadian company called Foam Creations. The Clogs preferred stock that will be issued for the deal will have a 6.0 percent cash dividend rate convertible into common stock with a conversion price of $14.50 per share, a nine percent premium to Clogs stockâ s Friday close of $13.33. The preferred stock represents 13.8 million common shares on an as-converted basis or 13 percent of fully diluted common shares outstanding. The deal has a stipulation that at any time after three years from issuance, if Crocs stock closes above $29.00 per share for 20 consecutive trading days, the preferred shares will, upon notice from Crocs, convert into common stock. Anytime after eight years from the issuance date, Crocs will have the right to redeem and the preferred stock holders the right to require Crocs to repurchase the shares or any part of the the preferred stock for 100 percent of stated value plus any unpaid dividends. Blackstone will get two seats on Crocs board as part of the deal. After the deal was announced, Prakash Melwani, Senior Managing Director and Chief Investment Officer of Blackstone's Private Equity Group stated that â
Published on Dec 30, 2013
By Jay Hawk