Sears Holdings Corporation has agreed to sell its Craftsman tool brand to Stanley Black & Decker Inc. for about $900 million. Craftsman tools will still be sold by Sears retail stores but the brand is being sold to Connecticut-based Stanley Black & Decker Inc.
Stanley will pay $525 million at closing, $250 million after three years, and make annual payments on new Craftsman sales for 15 years, the companies said in a statement Thursday. Sears will continue to sell Craftsman products at its stores. The license to Hoffman Estates, Illinois-based Sears will be royalty-free for 15 years, and then generate 3 percent afterward.
Bloomberg.com says only about 10 percent of Craftsman brand products are sold outside of the Sears retail umbrella. The deal with Stanley Black & Decker will allow the brand to expand to other sales channels.
Stanley Chief Executive Officer James M. Loree said in the statement. “This will add jobs in the U.S., where we have increased our manufacturing headcount by 40 percent in the past three years.” The deal comes about three months after Stanley agreed to buy Newell Brands Inc.’s tools business for $1.95 billion.
The deal has already been approved by the boards of both companies. No word on the lifetime replacement guarantee.