Crocs Inc. has agreed to buy casual shoe brand Heydude for $2.5 billion, bolstering its fast-growing business of offbeat footwear.

The purchase will be funded by $2.05 billion in cash and $450 million in Crocs shares issued to Heydude founder Alessandro Rosano, according to a statement. Crocs said it expects the deal to immediately add to its sales growth and earnings, while the combined operations will generate “significant” free cash flow.

The agreement underscores the rapid expansion of Crocs’ business as its once-derided foam clogs catch on with a hip Gen Z crowd. Crocs has said it expects revenue growth of as much as 65% this year. Heydude, which will operate as a stand-alone division, makes lightweight, casual shoes and sandals for men, women and children.

The deal for closely held Heydude is expected to close in the first quarter. Crocs expects to fund the cash component with a $2 billion term loan B facility and borrow $50 million under its existing senior revolving credit facility.

Citi is financial adviser to Crocs, while Perkins Coie LLP and Bird & Bird provide legal counsel. LVC Asia Pacific Ltd. is Heydude’s financial adviser, with Chiomenti, Deacons, Cozen O’Connor, Sullivan & Cromwell and Croon Law Group LLC serving as legal counsel.