Stanley Black & Decker’s strategic pivot continues as the industrial giant announced plans to sell its Consolidated Aerospace Manufacturing (CAM) business to Howmet Aerospace for a substantial $1.8 billion. This move marks another significant step in the company’s transformation strategy, which has already seen multiple divestitures aimed at streamlining operations and reducing debt.
The all-cash transaction, expected to close in the first half of 2025, represents approximately 15 times CAM’s adjusted EBITDA for the twelve months ending September 2024. For context, CAM generated approximately $350 million in revenue during this period, manufacturing highly engineered fastening and components for aerospace and defense applications.
“This transaction represents another milestone in our transformation journey,” said Donald Allan Jr., Stanley Black & Decker’s President and CEO. “The sale of CAM at an attractive valuation enables us to further simplify our portfolio and focus our resources on our core businesses while strengthening our balance sheet.”
The deal continues Stanley Black & Decker’s aggressive portfolio restructuring that began in earnest during 2022. The company has now announced or completed approximately $5 billion in divestitures, including the sale of its commercial electronic security business and oil and gas division. This latest transaction puts the company within striking distance of its stated goal of $6+ billion in divestitures.
Financial analysts have generally responded positively to the announcement. Morgan Stanley noted in a recent research brief that “the valuation appears strong given current market conditions, and the transaction should help accelerate debt reduction efforts.” Stanley Black & Decker has made debt reduction a priority, with Allan emphasizing the company’s commitment to achieving a strong investment grade credit profile.
For Howmet Aerospace, the acquisition represents a strategic expansion of its engineered products portfolio. John Plant, Howmet’s Executive Chairman and CEO, described the purchase as “highly complementary” to the company’s existing business lines. “CAM’s specialized manufacturing capabilities and strong position with leading aerospace customers align perfectly with our growth strategy,” Plant said in the press release.
The aerospace fasteners market has been experiencing robust growth, projected to reach $12 billion globally by 2030 according to data from Allied Market Research. This growth is driven by increasing aircraft production and the need for lightweight, high-performance components that can withstand extreme conditions.
The transaction includes CAM’s operations across multiple facilities in the United States and Mexico, with approximately 1,600 employees expected to transition to Howmet. Stanley Black & Decker has indicated it will use proceeds from the sale primarily for debt reduction, with some potential allocation toward share repurchases.
From a broader perspective, this divestiture reflects ongoing consolidation within the aerospace supply chain. The industry continues to recover from pandemic disruptions, with major manufacturers like Boeing and Airbus pushing suppliers to increase production capacity while maintaining strict quality standards.
The deal’s timing appears strategic, coming as aerospace manufacturers work through record backlogs and defense spending increases globally. According to the Aerospace Industries Association, the commercial aircraft backlog stands at over 14,000 planes, representing several years of production.
For Stanley Black & Decker shareholders, the transaction represents another step toward the company’s refocused strategy on its core tools and outdoor products businesses. The company’s stock has faced challenges in recent years, with shares down approximately 30% from pre-pandemic levels despite recent recovery.
“We remain committed to transforming Stanley Black & Decker into a more focused, higher-growth company that delivers consistent results and generates significant shareholder value,” Allan added.
Industry experts note that while the CAM business has been profitable, it represents a relatively small portion of Stanley Black & Decker’s overall revenue, which totaled approximately $15 billion in 2023. The divestiture allows management to concentrate resources on larger growth opportunities within its flagship power tools and hand tools segments.
The transaction remains subject to regulatory approvals and customary closing conditions. Both companies expect minimal disruption to CAM’s operations during the transition period, with customer relationships and product development initiatives continuing as planned.
As manufacturing sectors continue to evolve post-pandemic, Stanley Black & Decker’s strategic realignment reflects broader industrial trends toward portfolio optimization and focus on core competencies. Whether this transformation ultimately delivers the promised shareholder value remains to be seen, but the market appears cautiously optimistic about the company’s direction.
