NEW BRITAIN - City manufacturing giant Stanley Black & Decker on Thursday confirmed it is acquiring the Craftsman tool brand from Sears Holding Corp. in a $900 million deal.
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 joint statement. Sears will continue to sell Craftsman products at its stores. The license to Illinois-based Sears will be royalty-free for 15 years, and then generate 3 percent afterward.
Only about 10 percent of Craftsman-branded products are sold outside Sears today and the agreement allows Stanley to significantly increase Craftsman sales in these untapped channels, the New Britain-based company said.
“To accommodate the future growth of Craftsman, we intend to expand our manufacturing footprint in the U.S.,” Stanley Chief Executive Officer James M. Loree said Thursday. “This will add jobs in the U.S., where we have increased our manufacturing headcount by 40 percent in the past three years.”
The transaction comes on the heels of a busy 2016 for Stanley Black & Decker. Last month the company announced it would sell most of its mechanical security businesses to dormakaba for $725 million. The sale included the commercial hardware brands of BEST Access, phi Precision and GMT.
Earlier in the year, Stanley said it was set to acquire the tool division of Atlanta-based Newell Brands Inc. for $1.95 billion. The unit includes the industrial cutting, hand tool and power tool accessory brands Irwin and Lenox.
Sears shares rose 3 cents to close at $10.39 in trading on the New York Stock Exchange Thursday. Shares of Stanley gained $1.87, or 1.6 percent, to close at $118.35.
The department store chain has struggled, losing money for years as its revenue fell. Sears Holdings also announced plans Thursday to close 150 stores, about 10 percent of its total 1,500 locations. Among those slated to shutter are the 56-year-old Sears store in the Corbin’s Corner shopping center in West Hartford and the Kmart in Cromwell.
“We will continue to take actions to adjust our capital structure, meet our financial obligations and manage our business to better position Sears Holdings to create long-term value by focusing on our best members, our best stores and our best categories,” Sears CEO Edward S. Lampert said in the statement.
Stanley Black & Decker, which traces its roots in New Britain to 1843, bills itself as the world’s largest tools and storage company. It employs more than 52,000 people in 50 countries.
An Associated Press report is included in this story.
Christopher Fortier can be reached at 860-801-5063 or email@example.com.