* Blackstone gets preferred stock, 2 board seats
* Preferred stock has 6 pct cash dividend rate
* Crocs reaffirms low end of prior Q4 outlook
* CEO John McCarvel plans to retire in April
NEW YORK, Dec 29 Crocs Inc said
Blackstone Group LP is making a $200 million investment
that will give the private equity firm a 13 percent stake in the
In exchange for the $200 million, Blackstone will receive
preferred stock that can convert to common stock in three years
if certain conditions are met. It will also receive two board
The preferred stock will have a 6 percent cash dividend rate
and is convertible into shares of common stock at a conversion
price of $14.50 per share.
The shoemaker also said late on Sunday that the company's
chief executive, John McCarvel, plans to retire in April and
will also give up his seat on Crocs' board.
"We will recruit a new CEO who will work with the
reconstituted board to refine our short-term and long-term
strategic plans, which will include a sharper focus on earnings
growth with less emphasis on top-line growth," Chairman Thomas
Smach said in a statement.
Crocs, which is known for its colorful clogs, intends to use
the Blackstone investment to help pay for a $350 million stock
repurchase it expects to launch in the first quarter.
Established in 2002, Crocs sells its shoes, made out of a
proprietary closed-cell resin it calls Croslite and which are
offered in more than 300 four-season footwear styles in some 125
countries, according to its website.
Crocs posted a 2 percent decline in sales for the third
quarter, hurt by weakness in the Americas and Japan. The company
said it saw less discretionary spending for footwear, apparel
and other consumer goods in the United States.
The company now expects fourth-quarter revenue to be at the
low end of the previously provided outlook range of $220 million
and $225 million, while it expects loss per share to be near 23
Analysts, on an average, were expecting fourth quarter loss
per share of 20 cents on revenue of $222.3 million, according to
Thomson Reuters I/B/E/S.
Moelis & Co LLC was the financial advisor and Perkins Coie
LLP provided legal counsel for Crocs.
Blackstone was advised by Piper Jaffray & Co while Simpson
Thacher & Bartlett LLP acted as legal counsel in connection with