Shares of Spectrum Brands Holdings (NYSE:SPB) traded up 17.8% on Wednesday after the company announced plans to sell its hardware and home improvement assets in a deal worth $4.3 billion. The company intends to use the proceeds to clean up its balance sheet, and investors are cheering that decision.
On Wednesday morning, Spectrum announced an agreement to sell brands including Kwikset locks to Assa Abloy (OTC:ASAZY) of Sweden. Spectrum said it expects net proceeds of $3.5 billion from the deal, after taxes, which will be used to pay down its debt. That in turn should improve its leverage ratio, and free the company up to make future acquisitions in its areas of focus.