NIWOT, Colo., Jan. 27, 2014 /PRNewswire/ -- Crocs, Inc. (NASDAQ: CROX) today announced it has closed the previously announced investment from a fund affiliated with Blackstone to purchase $200 million of newly issued series A convertible preferred stock (the "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 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 been added to the board of directors, which remains at eight members. Mr. Melwani is currently a Senior Managing Director at Blackstone and Chief Investment Officer of the firm's Private Equity Group; Mr. 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 of the board. "They have served the company's shareholders well, and on behalf of the board, I would like to thank them for their service. We are sad to bid them farewell and wish them the best in their future endeavors. "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% ownership at closing, we believe our company, shareholders, and employees will benefit from 100% of Blackstone's focus, global resources, and expertise. This transaction provides a fantastic opportunity for our shareholders to participate alongside Blackstone and benefit from its efforts to deliver compelling shareholder value. "With the closing of the transaction and the appointment of our two new directors, we can now turn our attention to recruiting a new CEO and moving forward with refining the strategic direction of the Crocs business."
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