Triumph Group (TGI 1.79%) has agreed to sell its product support business for $725 million, cash that will immediately boost the struggling aerospace company's balance sheet. Investors are excited about the development, sending Triumph shares up more than 30% as of 1 pm ET Thursday.

The portfolio reshaping picks up pace

Triumph is a collection of aerospace businesses that has struggled in recent years. The shares have lost about 80% of their value over the past decade due to poorly timed deals that saddled the company with money-losing businesses and a high debt load.

The company has been slowly trying to reshape its portfolio, selling off unprofitable businesses and restructuring those it wants to keep. On Thursday, Triumph announced plans to sell its product support business to AAR (AIR 1.26%) for $725 million.

The deal values the business to be sold at about 15.5 times earnings before interest, taxes, depreciation, and amortization (EBITDA) and should help Triumph bring down its debt balance. Triumph is setting itself up to retire its notes due in 2025 and pay a portion of the debt due in 2028.

That would be a boost to earnings because interest expense would fall. It also avoids the risk of refinancing debt in the quarters ahead when rates might still be at an elevated level.

Is Triumph a buy after its big divestiture deal?

Triumph remains a work in progress, but for the first time in years, the focus is clear, and the company appears to be heading in the right direction. There is still work to be done, though. Even after the sale, Triumph's total debt would be about 4 times adjusted EBITDA, which provides relatively little flexibility. The company is also trying to right-size key businesses and work through whatever additional portfolio reshaping is necessary.

The goal is for Triumph to shift away from commoditized businesses and toward more priority assets with better pricing power, following the model of more successful aerospace stocks, like TransDigm Group and Heico. Triumph isn't there yet, but this latest divestiture is a solid step forward for patient investors.