Stanley Black & Decker will purchase the Craftsman brand from Sears Holdings in a transaction valued at approximately $900 million.

The transaction provides Stanley with the rights to develop, manufacture and sell Craftsman-branded products in non-Sears retail, industrial and online sales channels across the U.S. and in other countries. As part of the agreement, Sears 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.

Stanley Black & Decker will pay Sears Holdings $525 million at closing, $250 million at end of year three and annual payments on new Stanley Black & Decker Craftsman sales through year 15 (2.5% through 2020, 3% through January 2023 and 3.5% thereafter). The net present value of all these cash payments is approximately $900 million

Existing sales of Craftsman products outside the Sears Holdings and Sears Hometown distribution channels, which will be assumed immediately upon closing by Stanley Black & Decker, were approximately $200 million over the last 12 months. The company expects the sale of Craftsman branded products to contribute approximately $100 million of average annual revenue growth for approximately the next 10 years. The transaction is expected to be accretive to earnings by approximately $0.10-$0.15 per share in year one, increasing to approximately $0.35-$0.45 by year five and to approximately $0.70-$0.80 by year 10, excluding approximately $20 million of deal-related costs.

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.

“Craftsman is a legendary, American brand with tremendous consumer awareness built on a legacy of producing quality products at a great value,” said Stanley Black & Decker President and CEO James M. Loree. “This agreement represents a significant opportunity to grow the market by increasing the availability of Craftsman products to consumers in previously underpenetrated channels.”

Sears Holdings’ Chairman and Chief Executive Officer Edward S. Lampert stated, “We are pleased to reach this agreement, after determining that externalizing the Craftsman brand would accomplish our goals of driving value for Sears Holdings and positioning Craftsman for future growth. This transaction represents a significant step in our ongoing transformation to a membership focused business model.”

In other news, Sears Holdings plans to close 150 stores in 2017, including 109 K-Mart stores.