Crocs Eats a Competitor; Buys Bite Footwear (CROX)

By Douglas A. McIntyre Published Jul 30, 7:57AM EDT

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Everone knows Crocs, Inc. (NASDAQ:CROX) by now. Its meteoric stock rise is nearly unprecedented in modern footwear stocks. The company is acquiring a competitor this morning by the name of Bite Footwear. Bite has probably bitten as far as being a real competitor though. With the price tag you might even wonder if Crocs just wanted to fend off what is probably a fiscally troubled future threat that a stronger competitor could have done more with.

The size of the buyout is only a $1.75 million cash payout, with the potential for an earn-out of up to $1.75 million if certain earnings targets are acheived over a 3-year period. Bite was founded in 1996 and makes sport sandals and shoes that look eerily similar if you visit the company website. It sells shoes for golf, adventure, healthy lifestyle, and water sports. It looks like Crocs wants to apply its own materials into the existing manufacturing lines already in place to instantly expand its product offerings.

Crocs acquired Jibbitz last year, and a buyout of this size will be tiny for the company to integrate. It looks like it gets some instant new designs and also some instant R&D, so for the price it sounds like a lay-up for a fast-growth footwear company. Even if this ends up being a ‘competition killer’ as the sole ambition, this is a small price tag that won’t ever be noticed by shareholders. So far it is being well received as Crocs shares are trading up 2% pre-market. This is also on the heels of last week’s major earnings beat and hiked guidance.

Jon C. Ogg
July 30, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.