Big Deals: Crocs Acquires Hey Dude Shoes for $2.5 Billion Represented by Perkins Coie

Ian Farmer

In mid-February, Colorado-based Crocs Inc. finalized its acquisition of the Italian casual footwear brand Hey Dude Shoes with legal advisors from Perkins Coie’s Denver office. Denver partners Jeffrey Beuche and Jason Day, who co-led the acquisition, said it could be a “transformational deal” for Crocs, as they add the high growth brand to their portfolio.

Day and Beuche have worked together on numerous high-value acquisitions. The M&A lawyers point to the international and sophisticated cultural aspects of the Crocs acquisition that made the deal unique. Working with entities between “Italy, Hong Kong and Denver, there’s only a few hours where that lines up nicely. And many more hours that you have to make calls,” Day said, noting their end of the deal was completed remotely.

The acquisition was announced on Dec. 23, 2021 at a purchase price of $2.5 billion. The deal was paid $2.05 billion in cash and $450 million in Crocs’ stock issued to Alessandro Rosano, Hey Dude’s founder and CEO. Concurrent with the transaction, Crocs closed a $2 billion term loan B that will mature in 2029. The deal closed successfully on Feb. 17.

While this deal involved two high-value, consumer-facing brands, the Crocs acquisition was similar to other M&A deals Day and Beuche have worked on out of the Denver office of Perkins Coie. For the past 10 years, Day and Beuche have put together a Denver team precisely to handle these types of deals. “We’re the ones you’re talking to today, but this doesn’t happen without a strong and very large team behind us,” Beuche said.

In the Denver office, Beuche and Day were assisted on the counsel level by Blake Schell, Elizabeth Dietz and Jonathan Schulman. Aspects surrounding intellectual property were advised by Peter Kinsella, a partner in the Denver office. Out of the Seattle Perkins Coie office, executive compensation and benefits were handled by partner Lisa McGimpsey. The $2 billion loan and its term limits was worked on by Seattle partner Chian Wu and Denver partner Ned Prusse.

Beuche expects more sophisticated M&A deals like this in future. As this was an international deal, cultural and jurisdictional differences inspired some creative lawyering. “The stakes were very high for everyone involved,” Beuche said, as both parties came to the deal with different ideas of how it should be done, given how M&A work differs depending on the jurisdiction. “Finding that middle ground for both parties was an ongoing challenge.” But something important to him and Day is that the human element isn’t lost underneath all the paperwork.

“We are in the law business, and it’s technical,” Beuche said. “But in deals like this, it really becomes about people,” and during the legal counsel, it was important to find “moments of levity to build relationships that would forge compromises later.”

Day, who has represented Crocs for a number of years shared the same sentiment, “In some ways this is a service business, and we build relationships with our clients to work with them through some tough situations.”

Members at Perkins Coie have worked with Crocs before and during its initial public offering. This long standing relationship made Day excited for the deal with Hey Dude. “We’ve been a part in many steps of [Crocs’] life cycle, so it was great to work with them on a deal they were excited about.” Day even wore Hey Dude shoes throughout the acquisition as part of his “due diligence.”

In addition to working a sophisticated M&A, Day and Beuche were happy their team could work on an international deal for a local client. Day remarked, “This is what we’ve built and it’s nice when our clients based in the Rocky Mountain area don’t have to go to New York for a deal like this.”

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