Crocs, Inc. (NasdaqGS:CROX) entered into a definitive agreement to acquire Full Fortune Intellectual Limited, Full Fortune Worldwide Limited, Full Fortune Online Limited, Happy One LLC and Lucky Top Inc.(Hey Dude) from Full Fortune Wealth Limited and Daniele Guidi (Sellers) for $2.5 billion on December 22, 2021. Pursuant to the terms, Crocs will pay $2.05 billion in cash and and issue 2.85 million shares as consideration. $125 million of cash consideration will be placed in an escrow account to partially secure the indemnification obligations of sellers, which will be released to sellers, less any amounts that have been released to compensate Crocs as provided in the agreement, after the date that is 18 months after the Closing Date. Crocs will finance the cash consideration from the proceeds of the senior secured term loan B facility in an aggregate principal amount equal to $2 billion and borrow $50 million under the Company's existing Senior Revolving Credit Facility. Upon-completion, Hey Dude will operate as a standalone division. Alessandro Rosano, founder of Hey Dude will continue to lead innovative product development as Strategic Advisor and Creative Director. Rick Blackshaw was hired to join Hey Dude as Executive Vice President and Brand President.

The closing is subject to customary conditions, including, among others, execution of ancillary agreements, any waiting periods under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder, having expired or been terminated, resignation of all officers and members of the board of directors of Hey Dude, execution of escrow agreement and regulatory approval. The transaction is expected to close in the first quarter of 2022. As of February 16, 222, the transaction is expected to close in February 2022. The transaction is expected to be immediately accretive to 2022 revenue growth, operating margin and earnings. Citigroup Global Markets Inc. acted as financial advisor while Bird & Bird and Jason Day and Jeff Beuche of Perkins Coie LLP acted as legal advisor for Crocs. Marco Nicolini and Arnaldo Cremona of Chiomenti Studio Legale and Christian Moretti, Larry Laubach and David Kirchblum of Cozen O'Connor acted as legal advisors for sellers and Hey Dude. C. M. Segarra García of Croon Law Group LLC acted as legal advisor for Daniele Guidi, Happy One LLC and Lucky Top Inc. LVC Asia Pacific acted as financial advisor for Hey Dude. Deacons and David C. Spitzer of Sullivan & Cromwell LLP provided legal advice to Hey Dude. Davis Polk is advising the lead arranger in connection with debt financing. Cahill Gordon & Reindel LLP acted as legal advisor to Crocs, Inc.