NEW BRITAIN, Conn. and HOFFMAN ESTATES, Ill.—Stanley Black & Decker (NYSE: SWK) and Sears Holdings Corporation (NASDAQ: SHLD), announced today that they have entered into a definitive agreement under which Stanley Black & Decker will purchase the Craftsman brand from Sears Holdings.
The transaction provides Stanley Black & Decker with the rights to develop, manufacture and sell Craftsman-branded products in non- Sears Holdings retail, industrial and online sales channels across the U.S. and in other countries. As part of the agreement, Sears Holdings will continue to offer Craftsman-branded products, sourced from existing suppliers, through its current retail channels via a perpetual license from Stanley Black & Decker, which will be royalty-free for the first 15 years after closing and royalty-bearing thereafter.
Today, only approximately 10% of Craftsman-branded products are sold outside of Sears Holdings and the agreement will enable Stanley Black & Decker to significantly increase Craftsman sales in these untapped channels.
The agreement consists of $525 million cash payment at closing, $250 million at end of year three, and annual payments to Sears Holdings of between 2.5% and 3.5% on new Stanley Black & Decker sales of Craftsman products through year 15
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