(Reuters) - Aerospace supplier Triumph Group (NYSE:TGI) said on Thursday it would sell its components aftermarket business that makes structures, airframes and engine accessories to AAR (NYSE:AIR) Corp for $725 million, sending its shares up by 23.7% in early trading.
The move will help Triumph, which counts Boeing (NYSE:BA) and Airbus as customers, to cut down debt and focus on its key business of making aircraft parts, spares and intellectual property-based aftermarket businesses.
Pennsylvania-based Triumph has been working to strengthen its balance sheet and improve cash flow as suppliers ramp up production buoyed by robust demand for commercial jets as air travel rebounds post-pandemic.
"The addition of this high-margin business is expected to further increase our operating margin and is expected to be accretive to our earnings," AAR Corp CEO John Holmes said in a statement.
The companies said the deal will close in the first half of 2024.
Shares of AAR were up 3% in morning trade.