Business Acquisition |
12 Months Ended |
|---|---|
Jan. 03, 2026 | |
| Business Combination [Abstract] | |
| BUSINESS ACQUISITION |
3. BUSINESS ACQUISITIONS AND DIVESTITURE 2023 Acquisitions On January 27, 2023, the Company completed the acquisition of Schultes Precision Manufacturing, Inc. ("Schultes"), an Illinois corporation. Schultes is a highly trusted specialist in manufacturing precision machined components and assemblies for customers requiring very tight tolerances, superior quality and exceptional value-added manufacturing processes. Currently serving the hydraulic, aerospace, communication, food services, medical device and dental industries, Schultes brings the manufacturing quality, reliability and responsiveness critical to its customers’ success. The results of Schultes' operations are reported in the Company’s Hydraulics segment and have been included in the Consolidated Financial Statements since the date of acquisition. Initial cash consideration paid at closing for Schultes, net of cash acquired, totaled $84.7. Cash consideration paid at closing was funded with additional borrowings on the Company’s credit facility. On May 26, 2023, the Company completed the acquisition of i3 Product Development, Inc. (“i3PD”), a Wisconsin corporation. i3PD is a custom engineering services firm, employing engineers with expertise in electronics, mechanical, industrial, embedded and software engineering. i3PD's solutions are used across many sectors, including medical, off-highway, recreational and commercial marine, power sports, health and wellness, agriculture, consumer goods, industrial, sports and fitness. i3PD equips Helios with significant value-added professional services capabilities to provide customization to Helios platforms and to develop greenfield solutions. The results of i3PD's operations are reported in the Company’s Electronics segment and have been included in the Consolidated Financial Statements since the date of acquisition. Initial consideration paid at closing for i3PD, net of cash acquired, totaled $44.0, consisting of 370,276 shares of the Company's common stock, issued in a private placement to the previous owners of i3PD, and cash of $25.4. The cash consideration paid at closing was funded with additional borrowings on the Company’s credit facility. In connection with these acquisitions, the Company recorded $37.7 of goodwill, $48.0 of other identifiable intangible assets, $34.2 of property, plant and equipment and $8.8 of other net assets. The intangible assets include customer relationships of $36.4 (15.7 year weighted average useful life), trade names and brands of $7.6 (14.0 year weighted average useful life), technology of $3.3 (5.0 year weighted average useful life) and sales order backlog of $0.7 (less than one year weighted average useful life). The purchase price was allocated to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The fair value of identified intangible assets acquired was based on estimates and assumptions made by management at the time of the acquisitions. Pro forma results of operations and the revenue and net income subsequent to the acquisition dates for the acquisitions completed during fiscal 2023 have not been presented because the effects of the acquisitions, individually and in the aggregate, were not material to the Company's financial results. 2025 Divestiture On September 27, 2025 the Company completed the sale of the outstanding equity interest in Guwing Holdings Pty. Ltd. ("Guwing"), and Guwing's 100% ownership of the share capital of Custom Fluidpower Pty. Ltd. ("CFP") to a non-related party (the "Divestiture"). CFP was acquired in August 2018 and expanded the Company's hydraulics operations and footprint in Asia-Pacific Region ("APAC"). Since acquiring CFP, we have further invested in the APAC region as part of our "in the region for the region" strategy and have expanded manufacturing and design engineering capabilities. The preliminary sales price for the divestiture was $76.7 AUD in cash including adjustments for estimated closing date net working capital and cash on hand, consisting of $60.5 AUD in cash to the Company and $16.2 AUD that the buyer agreed to pay directly to the Company’s lender in satisfaction of subsidiary-level debt. The sales price is subject to adjustments based on the final closing date net working capital and cash on hand of the divested business. As of September 27, 2025, the Company recorded a receivable of $38.4 USD for proceeds to be received directly from the buyer, which was subsequently settled when the buyer remitted payment on October 1, 2025. The Company also recorded a receivable of $1.3 USD for proceeds that were held back from initial funding and are to be paid no later than two years from the completion of the transaction. The hold back amount is not held in escrow and not subject to interest. It is not contingent on any performance obligation, but will be used to settle claims made by the buyer per the terms of the purchase agreement for a matter that existed pre-close, provided the Company agrees or the matter is solved through arbitration. No claims have been identified as of the period end date and future claims are not probable or estimable. Therefore, no provision has been made for potential claims. This receivable is presented within Other assets on the Consolidated Balance Sheet for the period ending January 3, 2026. There was no impact on the Company’s cash flows in the current period. The Company recognized (i) a pre-tax gain net of costs to sell on the sale of the subsidiary’s net assets and (ii) a reclassification of the cumulative translation adjustment ("CTA") related to the subsidiary from accumulated other comprehensive income ("AOCI") to earnings, as required by ASC 830-30 when a foreign operation is sold or substantially liquidated. The gain on sale and the reclassification of CTA were presented together in continuing operations and are included in Other non-operating income, net on the Consolidated Statement of Operations for the year ended January 3, 2026. The components of the pre-tax gain recognized in USD were:
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Proceeds to be received from sale, net of $10.5 outstanding CFP debt (all cash): $39.7.
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Carrying value of net assets disposed: $29.3.
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Pre-tax gain net of $0.3 costs to sell on disposal before reclassification of CTA: $21.0.
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Reclassification of CTA (AOCI to earnings): $2.2.
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Pre-tax gain recognized in continuing operations: $18.8.
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Income tax expense related to the gain and reclassification of CTA: $3.5.
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Net gain after tax recognized in continuing operations: $15.2.
The subsidiary was included in continuing operations because the sale did not meet the criteria to be reported as discontinued operations under ASC 205-20. The net income of the disposal group through the completion date is included in the Company's Consolidated Statements of Operations. For the year ended January 3, 2026 and December 28, 2024, pre-tax profit of the disposal group was $2.3 and $4.5 respectively, excluding the reclassification of CTA. The pre-tax gain on disposal and the reclassification of CTA are not included in the segment results as the elements of the pre-tax gain are not used by the chief operating decision maker (CODM) for assessing Hydraulics segment performance. Certain disclosures have not been presented as the effect of the acquisition and divestiture were not material to the Company's financial results. |