Crocs Inc.(Nasdaq: CROX.O), the retailer of foam resin shoes, announced today that Blackstone Group LP will invest $200 million in the company just as the footwear company's CEO John McCarvel is retiring.
Crocs said it will use the funds from Blackstone's investment in convertible preferred stock to increase share repurchases to $350 million. The stock will have a six percent cash dividend rate, and at any time after three years from the issuance date, if the closing price of Crocs common stock equals or exceeds $29.00 for a period of 20 consecutive trading days, then the preferred stock shares will convert into shares of common stock, the statement read. The investment allows the private equity group to have two seats on the board of directors of the shoe company.
"We expect these initiatives to reduce volatility in both our common stock price and our shareholder base and provide a strong foundation to unlock long-term value for our shareholders," said Crocs chief financial officer Jeff Lasher.
McCarvel, who is also the company's president and board member, said he would retire and leave those positions in April. He has been with Crocs since 2005, and had been president and CEO since 2010, during which he expanded the company's products to include other styles of footwear and opened new stores. Crocs said it has begun an outside search for McCarvel's replacement.
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