Stanley Black & Decker (NYSE: SWK) has agreed to sell its Consolidated Aerospace Manufacturing (CAM) business to Howmet Aerospace for an all‑cash consideration of $1.805 billion, with the transaction expected to close in the first half of 2026.
The sale removes a non‑core unit that generated FY 2025 revenue of $405–$415 million and an adjusted EBITDA margin in the high‑teens, allowing SWK to focus on its Tools & Outdoor and Engineered Fastening segments while accelerating a $2 billion global cost‑reduction program that has already delivered $1.9 billion in pre‑tax run‑rate savings.
The $1.8 billion proceeds will be used primarily to reduce debt, moving the company closer to its target net debt‑to‑adjusted EBITDA ratio of 2.5× or less. The deleveraging is expected to strengthen free cash flow, provide flexibility for future capital allocation, and potentially support share buybacks.
Analysts and investors reacted positively to the announcement, with SWK shares rising 3.88 % in pre‑market trading and several firms raising their price targets. The market view the deal as a clear step toward a leaner, higher‑margin portfolio and a stronger balance sheet.
CEO Chris Nelson said the divestiture “reflects our ongoing dedication to enhancing shareholder value and focusing on growing our biggest brands and businesses.” He added that the proceeds will “significantly reduce our debt, positioning us to achieve our target leverage ratio” and that the sale “provides greater flexibility to pursue additional value‑creation opportunities.”
The transaction also completes a strategic pivot that began in mid‑2022, when SWK launched a multi‑year transformation plan to cut costs, streamline its portfolio, and deleverage. The sale of CAM, acquired in 2020 for $1.5 billion, is the final chapter of that plan and removes a unit whose margin profile was below the company’s core businesses.
While the company faces tariff impacts and macroeconomic uncertainty, its core Tools & Outdoor and Engineered Fastening segments have shown resilience. The sale is expected to improve the overall margin profile, as CAM’s high‑teens EBITDA margin is lower than the company’s target high‑teens to low‑twenties range for its core units.
By divesting CAM, Stanley Black & Decker positions itself to invest more aggressively in high‑growth areas, strengthen its balance sheet, and deliver greater value to shareholders over the long term.
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