We maintain our 12-month price target of $210 based on 17.8x our 2022 EPS estimate, lower than the company's three-year average forward P/E. We raise our 2022 EPS estimate by $2.09 to $11.80. CROX announced a deal to acquire HEYDUDE, a privately-owned casual footwear brand for $2.5B. CROX expects to close on the deal early in 2022 and will fund the deal with $2.05B in cash and $450M in CROX shares. CROX expects to enter into a $2.0B Term Loan facility and borrow another $50M through the company's existing Senior Revolving Credit Facility to raise the cash. CROX expects HEYDUDE to be immediately accretive to earnings and revenues and guided for an additional $700M-$750M in revenues in 2022. CROX also expects the HEYDUDE brand to grow 20% annually and have +26% operating margin, which is in line with the Crocs brand. We expect some short-term impact to operating margin as the brands merge and use debt to finance the majority of the deal but are positive on the deal and Crocs moving forward.
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