Stanley Black & Decker Inc. (SWK) shares are trading higher Monday after the tool and hardware giant announced it's offloading a piece of its business that doesn't quite fit the portfolio anymore.

What's Happening: Stanley Black & Decker has signed a definitive agreement to sell its Consolidated Aerospace Manufacturing business to Howmet Aerospace for $1.8 billion in cash. The move is all about getting back to basics—focusing on the core brands and businesses that made Stanley a household name while boosting shareholder value.

Here's where things get interesting for investors: Stanley plans to take those proceeds and attack its debt pile. The company is targeting a leverage ratio of 2.5 times net debt to adjusted EBITDA, which would give management considerably more breathing room for future capital allocation decisions. Translation? Less debt means more flexibility to invest, acquire, or return cash to shareholders down the road.

The aerospace business being sold isn't exactly small potatoes. Consolidated Aerospace Manufacturing is expected to pull in roughly $405 million to $415 million in revenue for fiscal 2025, with adjusted EBITDA margins approaching the high-teens. That's a solid business, but apparently not core enough to keep around when you're trying to streamline operations.

The transaction should close sometime in the first half of 2026, assuming it clears regulatory hurdles and satisfies the usual closing conditions. Until then, the aerospace unit's financials will stay in continuing operations rather than being reclassified as discontinued.

Price Action: At the time of writing, Stanley Black & Decker shares were up 3.88% to $75.57.