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Next on the cash-strapped saga: Sears forms REIT and enters into joint venture

BY HBSDealer Staff

Sears Holdings Corp. has written a new chapter in its ongoing quest to shore up extra liquidity.

The company announced Wednesday that it is forming a real estate investment trust to buy up several Sears and Kmart stores. It's also forming a joint venture with shopping mall company General Growth Properties in order to sell and lease back a handful of its stores.

"Today's announcement demonstrates our ability to unlock a small portion of Sears Holdings' vast and valuable real estate portfolio, and represents an important step in the continued transformation of Sears Holdings," said chairman and CEO Edward Lampert. "We continue to show that Sears Holdings is an asset-rich enterprise with multiple levers to generate financial flexibility, while creating shareholder value. The JV and its structure are consistent with our transition from a store-focused network to a more asset-light, member-centric retailer and it provides additional capital to invest in the future of our membership and integrated retail platforms."

The new REIT, named Seritage Growth Properties, will buy approximately 254 Sears and Kmart stores for a price tag of over $2.5 billion.

The company also said it's planning to offer rights to acquire Seritage shares to all existing Sears stockholders.

Separately, in the alliance with General Growth Properties, Sears plans to sell and lease back 12 of its stores currently located in General Growth's malls, which are valued at $330 million. These include existing Sears Holdings stores and stores leased to third parties occupying former Sears Holdings stores.

General Growth Properties, which has a 50% stake in the joint venture, has contributed $165 million to Sears. Sears also said that should it complete the rights offering of Seritage shares to its stockholders, it will sell its 50% stake to Seritage for the same amount.

According to Sears chairman and CEO Edward Lampert, Sears Holdings will continue to operate the 12 stores.

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PPG acquires Flood Australia

BY HBSDealer Staff

PPG Industries has scooped up Flood Australia, a manufacturer and distributor of specialty wood stain and paint additive solutions.

“The acquisition of Flood Australia allows PPG to further expand its architectural paint and coatings offering and establish a position in wood care in Australia,” said Michael McGarry, PPG president and COO. “We look forward to providing customers with the same quality products for which the Flood brand has become known in Australia.”

Flood products are sold at various home improvement stores in Australia, including Bunnings, Masters, Mitre 10, Danks and various independent paint dealers.

Currently, PPG manufactures and distributes Flood wood care products in North America.

The acquisition did not include the company's manufacturing assets or facilities. However, the specific financial terms of the transaction were not disclosed.

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Pittsburgh Paints partners with Independent We Stand

BY HBSDealer Staff

PPG Pittsburgh Paints is making moves with Independent We Stand, the nonprofit in the bully pit for independent, local businesses.

The new exclusive partnership is an intuitive move for Pittsburgh Paints, which is sold exclusively by independent dealers across the country.

“Our partnership with Independent We Stand demonstrates PPG’s commitment to local, independent dealers,” said John Trenta, senior brand manager, PPG Architectural Coatings. “At PPG, we’ve been working with independent dealers for more than 100 years, and we’re continually looking for opportunities to increase the visibility and support for dealers. This partnership with Independent We Stand enables us to do just that.”

The alliance will allow independent retailers that sell PPG Pittsburgh Paints products to receive an immediate premium membership with Independent We Stand — granting them access to its marketing materials, resources, signage and more.

“We’re excited to partner with the PPG Pittsburgh Paints brand, which represents unparalleled quality to independent dealers across the U.S.,” said Bill Brunelle, co-founder, Independent We Stand. “It makes sense for our two entities to jointly support the growth and success of independent dealers and the communities where they operate.”

Independent We Stand's previous exclusive paint partner was Devoe Paint, which recently combined with the PPG Pittsburgh Paints brand into a unified entity.

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