Stanley Black & Decker to buy Sears' Craftsman brand for $900 million
Stanley Black & Decker said on Thursday it would buy Sears Holdings' Craftsman tool brand for $900 million, strengthening its portfolio of hand and power tools.
Struggling Sears, whose shares were recently up 49 cents, or 4.7 percent, at $10.85, said in May it wanted to expand the business housing its Craftsman, Kenmore appliance and DieHard vehicle battery brands beyond Sears and Kmart stores.
The Craftsman sale is part of a broader strategy Sears has to boost its liquidity. That plan includes the closure of 150 unprofitable Sears and Kmart stores, among other steps.
The Craftsman line includes power tools such as saws and drills and hand tools such as wrenches and screwdrivers as well as lawn mowers, barbecue grills and other gardening equipment.
Stanley Black & Decker's brands include Stanley, Black+Decker, Dewalt and Porter-Cable.
The Sears deal is the second big one for Stanley Black & Decker in the past three months.
The company agreed to buy Newell Brands' tool business for $1.95 billion in October, adding brands such as Irwin and Lenox to its lineup.
The Craftsman deal will give Stanley Black & Decker the right to make and sell Craftsman-branded products in non-Sears retail, industrial and online sales channels.
The company's shares were up 2.5 percent at $119.44.
Sears will continue to offer Craftsman-branded products at Sears and Kmart stores through a perpetual license from Stanley Black & Decker.
Stanley Black & Decker said it expected Craftsman branded products to generate about $100 million of average annual revenue for the next 10 years.
The company said the deal would add 10-15 cents per share to its earnings per share in the first year after closing in 2017, about 35-45 cents by year five and 70-80 cents by year 10.