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Shares of fashion designer Fossil Group Inc. (FOSL - Get Report) were rising Thursday afternoon after the company said it plans to sell technology related to its high-end watches to Alphabet Inc.'s Google (GOOGL - Get Report) . 

Fossil's stock was rising 3.33% to close at $18.00 a share. 

In the deal, Google will pay $40 million to Fossil in exchange for intellectual property needed to make the watches, according to Fossil's press release. Research and development employees at Fossil will join Google employees to work on transferring the intellectual property to Google. 

"Fossil Group has experienced significant success in its wearables business by focusing on product design and development informed by our strong understanding of consumers' needs and style preferences," said Greg McKelvey, executive vice president and chief strategy and digital officer. 

The partnership with Google is essential for the development of what could be a lucrative slate of watches. "Together with Google, our innovation partner, we'll continue to unlock growth in wearables," McKelvey added. 

Wearables are becoming an increasingly important category of hardware technology for big players like Apple Inc. (AAPL - Get Report) and Google. "The addition of Fossil Group's technology and team to Google demonstrates our commitment to the wearables industry by enabling a diverse portfolio of smartwatches and supporting the ever-evolving needs of the vitality-seeking, on-the-go consumer," said Google Vice President of Product Management Stacy Burr. 

Google and Apple are holdings in Jim Cramer's Action Alerts PLUS member club. Members of Cramer's Action Alerts Plus club can watch Cramer's exclusive call on Thursday, Nov. 17.