Helios to sell subsidiary for $54 million

Helios Technologies has agreed to sell one of its subsidiaries for approximately $54 million. The Sarasota-based company, which focuses on engineered motion control and electronic controls technology, plans to sell Custom Fluidpower (CFP) to Questas Group in an all-cash transaction.

CFP provides engineered hydraulic solutions in Australia, where it has 200 employees and eight branches, according to its website.

Helios Technologies acquired CFP in 2018 for approximately $26 million. Annual sales were $46 million at the time and have expanded each year, growing to $61 million in 2024, with earnings more than doubling since the acquisition, according to Helios President, CEO and CFO Sean Bagan.

“This planned divestiture of CFP demonstrates our commitment to value creation as we refine our operating model, instilling financial discipline and driving improved returns on invested capital,” Bagan says in a statement. “As we assess our business models, we recognize that its position as a leading fluid power distributor and service provider aligns more effectively with our value-added distribution customer base.”

Questas, which is headquartered in Sydney, Australia, will enter into a long-term exclusive distribution agreement with Helios, subject to annual growth targets tied to market conditions, that will assure Helios' strategic position in the Australian hydraulics market, according to a statement.

“We are excited that CFP will remain an ongoing customer,” Bagan says in a statement. “While the divestiture will reduce Helios’ sales and earnings run rates, it will improve margin rates within our hydraulics segment and at a consolidated level.”

The transaction will enable Helios to focus on its core manufacturing capabilities in the Asia-Pacific region, according to Bagan, who says the backing of Questas — which has more than 850 employees across 37 locations — will also provide growth opportunities for CFP.

“The CFP team brings deep expertise in system design, custom manifolds, cartridge valves and hydraulic-release brakes — solutions we previously sourced externally,” Questas Group CEO Mark Taylor says in the statement. “CFP strengthens our value proposition to customers, significantly advancing our ability to serve the full hydraulics lifecycle.”

Helios expects the transaction to close in the next 60 to 90 days. Squire Patton Boggs is providing legal counsel to the company in connection with the sale.

Helios posted $805.9 million in sales in 2024. It had net sales of $212 million in the second quarter, according to an Aug. 4 earnings report, in which the company raised its guidance for the rest of the year from $775 million to $825 million net sales (issued in February) to $810 million to $830 million net sales.

"While there is still a degree of uncertainty associated with tariffs and persistent weakness in a number of our end markets, given our first half outperformance and the approaching convergence of orders to sales, we expect to achieve modest growth for the full year of 2025 over last year — even adjusting for the announced CFP divestiture," Bagan says in a statement. 

The company has seen "seven months in a row of growth in our consolidated order book, and some markets are showing signs of stabilization," Bagan continues, noting there are "some unfavorable mix dynamics" and "some impacts to margins" from tariffs, despite mitigation plans.

“Conditions in many of our markets continue to trend more favorably but are not yet fully recovered," Bagan says in the statement. "In the meantime, we are working hard to make Helios a better business. There are many changes occurring within the company that are both readily impactful, like the planned divestiture of CFP, as well as changes to our organizational structure and operations that we expect to improve future results. We are simplifying the business by focusing on our core brands and enhancing the product portfolio."