Convent sells CIREX: Twente foundry with dozens of robots comes into foreign hands

Cirex, a company from Twente that supplies steel components to car manufacturers such as BMW and Mercedes, has been taken over by a foreign strategic party. The American Form Technologies bought all shares in the Dutch manufacturing company on Friday.

Cirex was once part of Philips Physics Laboratory. It is one of the largest steel foundries in the world that uses the lost wax method, whereby products can be made with great precision. The company has a head office in Almelo (for sales, marketing, engineering and production) and has two production facilities in the Czech Republic (220 employees) and Slovakia (40 employees).

Seven days a week
The company has more than 400 employees and, partly due to the use of a few dozen robots, realizes an annual turnover of € 40 million. The robotization enables parts to be produced seven days a week.

The company from Twente, 60 years ago and nominated last year for the Koning Willem I Prize, makes complex steel products for passenger cars and trucks. The parts for the car are used in the engine, gearbox or chassis.

Cirex specializes in precision casting and is a supplier to many companies in the automotive industry, the process industry and machine construction.

According to financial director Hans Alferink, the company is in a growth phase. According to him, many orders come in from foreign car manufacturers.

New owner
Cirex saw an increase of 10% to € 40 million revenues last year. The gross operating profit (EBIT) amounted to 8% or € 3.2 million.

The new owner Form Technologies also makes technical components and has a total of 29 production locations. It will have Cirex work closely with Signicast, part of Form Technologies. That industrial company has three locations in the United States and no location in Europe. “With Cirex they can shape their growth ambitions in Europe,” says financial director Alferink.

Cirex management remains
Form Technologies buys the shares of two Amsterdam investment companies, Convent Capital and Nedvest, and from the management of Cirex, which owns a small minority stake. The acquisition price has not been disclosed. In the new structure, the Dutch management is no longer a shareholder in Cirex.

The staff was informed of the sale on Thursday. The arrival of the Americans has no consequences for employment and management under the leadership of director Jeroen Spoelder. Negotiations for the sale took eight months. There were also other buyers who showed an interest in Cirex.

Low labor costs
In Almelo, the company makes large series of engine parts, and smaller series in the foreign branches. The wage costs are lower there than in the Netherlands, which makes it attractive to make those parts at these subsidiaries.

In 2008 a new casting hall was built in Almelo, with a fully robotised casting installation. With this investment, the casting capacity shot up by 50%. Six years later, investor Nimbus sold a gross interest of 75% in the industrial company to Convent Capital for an amount of € 14 million. Investment company Nedvest also stepped in at that time.