HOFFMAN ESTATES, Ill.,
March 9, 2017 /PRNewswire/
-- Sears Holdings Corporation ("Holdings," "we," "us," "our,"
or the "Company") (NASDAQ: SHLD) announced today that it has closed
the previously announced sale of the Craftsman brand to
Stanley Black & Decker for a net
present value of over $900
million.
Edward S. Lampert, Chairman and
Chief Executive Officer of Sears Holdings, said: "The successful
closing of the Craftsman transaction provides immediate liquidity
to Sears Holdings, while enabling us to participate in the future
growth of the Craftsman brand. In addition, the related agreement
with the Pension Benefit Guaranty Corporation (the "PBGC") will
continue to secure our pension obligations, while helping us
maintain financial flexibility."
The transaction provides Stanley Black& Decker with the
right to develop, manufacture and sell Craftsman-branded products
outside the Sears Holdings and Sears Hometown & Outlet Stores
distribution channels. As part of the agreement, 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.
As part of the closing, the Company received an initial upfront
cash payment of $525 million subject
to closing costs and an adjustment for working capital changes. In
addition, Stanley Black & Decker
will pay a further $250 million in
cash in three years and Sears Holdings will receive payments of
between 2.5% and 3.5% on new Stanley
Black & Decker sales of Craftsman products for the next
15 years.
In connection with the closing of the Craftsman transaction, the
Company reached an agreement with the PBGC pursuant to which the
PBGC has consented to the sale of the Craftsman-related assets that
had been "ring-fenced" under the March
2016 pension plan protection and forbearance agreement
between the PBGC and the Company (the "PPPFA") and certain related
transactions. As a condition to obtaining this consent, the Company
agreed to grant to the PBGC a lien on, and subsequently contribute
to the Company's pension plans, the value of the $250 million cash payment payable to the Company
on the third anniversary of the Craftsman closing, with the value
of such payment being fully credited against certain of the
Company's minimum pension funding obligations in 2017, 2018 and
2019.
The Company also granted a lien to the PBGC on the 15-year
income stream relating to new Stanley
Black & Decker sales of Craftsman products, and agreed
to contribute the payments from Stanley
Black & Decker under such income stream to the Company's
pension plans, with such payments to be credited against the
Company's minimum pension funding obligations starting no later
than five years from the closing date. The Company also agreed to
grant the PBGC a lien on $100 million
of real estate assets to secure the Company's minimum pension
funding obligations through the end of 2019, and agreed to certain
other amendments to the PPPFA.
Sears Holdings will also release its financial results for
fiscal 2016 fourth quarter and full year today, Thursday, March 9, 2017. The Company will
simultaneously post a pre-recorded conference call and audio
webcast on its corporate website. It will feature prepared remarks
from Jason M. Hollar, Chief
Financial Officer, who will focus his comments to provide
additional context around the quarter and the Company's progress on
its strategic transformation, including the sale of Craftsman.
The pre-recorded conference call may be accessed by telephone at
844.826.0613 or 973.200.3092 (conference ID: 81158037), and on
Sears Holdings' website at http://www.searsholdings.com/invest/
under "Events & Presentations." The accompanying presentation
and transcript will be posted online in
conjunction.
Forward-Looking Statements
This press release contains
forward-looking statements intended to qualify for the safe harbor
from liability established by the Private Securities Litigation
Reform Act of 1995. Whenever used, words such as "believe,"
"estimate," "intend," "will," "expect," and other terms of similar
meaning or expression are intended to identify such forward-looking
statements. Forward-looking statements, including these, are based
on the current beliefs and expectations of our management and are
subject to significant risks, assumptions and uncertainties, many
of which are beyond the Company's control, that may cause our
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by these forward-looking statements. Detailed
descriptions of other risks relating to Sears Holdings are
discussed in our Annual Report on Form 10-K for the fiscal year
ended January 30, 2016, and other
filings with the Securities and Exchange Commission. While we
believe that our forecasts and assumptions are reasonable, we
caution that actual results may differ materially. We intend the
forward-looking statements to speak only as of the time made and do
not undertake to update or revise them as more information becomes
available, except as required by law. Results presented herein are
unaudited.
About Sears Holdings Corporation
Sears Holdings
Corporation (NASDAQ: SHLD) is a leading integrated retailer focused
on seamlessly connecting the digital and physical shopping
experiences to serve our members - wherever, whenever and however
they want to shop. Sears Holdings is home to Shop Your Way®, a
social shopping platform offering members rewards for shopping at
Sears and Kmart, as well as with other retail partners across
categories important to them. The Company operates through its
subsidiaries, including Sears, Roebuck and Co. and Kmart
Corporation, with full-line and specialty retail stores across
the United States. For more
information, visit www.searsholdings.com.
NEWS MEDIA CONTACT:
Sears Holdings
Public Relations
(847) 286-8371
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SOURCE Sears Holdings Corporation