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Published in Manufacturing

Feyen Zylstra sells Industrial Tech division to automation integrator ATS Global

BY Friday, November 11, 2022 04:43pm

WALKER — What started out as a conversation between executives at Feyen Zylstra LLC and ATS Global about deepening their partnership for Industry 4.0 technologies ultimately led to the two companies striking a deal. 

Under the agreement, electrical solutions firm Feyen Zylstra will sell off its Industrial Tech division to Netherlands-based ATS Global, a manufacturing I.T., automation and controls, product lifecycle management and manufacturing enterprise solutions company with more than 1,400 employees worldwide. 

With the deal, about 40 Feyen Zylstra employees in West Michigan and near Charlotte, N.C. will transition over the next month to ATS Global, which maintains an office in Rochester Hills for its ATS Applied Tech Systems LLC business. The sale also includes Feyen Zylstra’s Industrial Technology Center facility in Walker. 

Feyen Zylstra CEO Nate Koetje told MiBiz that the company had been partnering with ATS Global to deliver manufacturing technology solutions to customers on a more frequent basis, which led to discussions about what a more formalized partnership between the two companies might look like. 

“I don’t know that we were looking to exit the business, per se,” Koetje said. “But as our relationship with ATS grew and evolved and looking at what our customers were really needing, it became pretty clear that it would be in the best interest of our customer base, of our industrial technology employees and FZ overall. … It ultimately resulted in us and them deciding that an acquisition of this chunk of FZ would be the best path forward.” 

Feyen Zylstra first started developing the Industrial Tech division about five years ago as the company noticed that its customers were needing more sophisticated technology solutions as part of a broad shift to more connected factories and Industry 4.0. Buoyed by its entrepreneurial culture, the company invested in developing the Industrial Tech team to better meet those needs, Koetje said. 

In 2021, Feyen Zylstra also acquired North Carolina-based Dynics Services Group to bolster its capabilities in industrial grade computer hardware, visualization software, network security, network monitoring and software defined networking solutions.

The Industrial Tech division grew to 10 percent of Feyen Zylstra’s business and was “growing and thriving,” said Koetje, who noted the sale will allow the company to focus on its main operations in electrical solutions, which are unaffected by the deal. 

“For FZ, at our root, we’re a construction company focused on providing electrical solutions throughout West Michigan, the state of Michigan and beyond,” he said. “This really gives us a chance to really draw our focus into our core and our roots and get back to focusing on what we’re good at, and allow our Industrial Tech team to be focused on what they’re really good at.”

Terms of the deal with ATS were not disclosed. Grand Rapids-based law firm Miller, Johnson, Snell & Cummiskey PLC advised Feyen Zylstra on the transaction.  

The full transition of the business and employees is expected to be finalized as of Jan. 1, 2023. 

Also included in the deal is the Smart Manufacturing Innovation Center that the company launched earlier this year in partnership with the U.S. Department of Energy-funded Clean Energy Smart Manufacturing Institute, which provided $250,000 in funding, as MiBiz previously reported

In deciding to sell the Industrial Tech division, Koetje said executives considered what a deal would mean for the employees, the customers and Feyen Zylstra itself.

“No. 1, it had to be good for our employees. FZ has a unique culture around employees and being employee-centric, and ensuring folks are well trained, empowered to make decisions and can be entrepreneurial. Not a lot of businesses have that, but ATS certainly did. That made it easy to keep the conversation going,” he said. 

Koetje even visited some of ATS Global’s international offices to spend time with employees to validate that the companies’ cultures were aligned. 

As well, ATS Global’s scale and capabilities would “ensure that this was going to accelerate the technology solutions that customers were going to have access to,” he said. “And then lastly, we think about it being good for FZ. For our business, does this make sense in terms of our future planning and our vision for the future? 

“This checked all of those boxes. I don’t think we would have exited the business if it weren’t for ATS.”

‘Full alignment’

ATS Global has maintained U.S. operations for about 20 years and works with customers in the automotive, aerospace, food and beverage and life sciences industries. The deal with Feyen Zylstra came as the company was seeking out a way to bolster its footprint in North America.

“FZ’s Industrial Tech division was the match we were looking for, with like-minded technical experts, a leadership team that shares our ambition for growth in the U.S. and, most importantly, full alignment on our culture of people and customer centricity,” ATS Global CEO Kevin Partington said in a statement. “With our shared ecosystem of existing partners such as Inductive Automation, Microsoft, Kepware and ABB, there’ll be a fast realization of added value that we can provide to our existing and potential customers. In addition, our international customers will benefit from our ability to support plants globally.”

Koetje noted that Feyen Zylstra plans to continue working with ATS Global as a preferred integrator for Industry 4.0 solutions for its clients. As well, the company aims to use the proceeds from the sale to reinvest in its employees and its electrical solutions capabilities.

“Think of it as a doubling down on our electrical solutions business,” he said. “That business is 90 percent of FZ, so it really gives us a chance to refocus and re-energize, not just with our time, but also with our financial resources, to ensure that we have a great culture and we have the best trained employees, and that our customers are experiencing the best that we can provide.”

Koetje also views the sale of the Industrial Tech division as Feyen Zylstra demonstrating and living up to the culture of entrepreneurism that it strives to support among its employees. 

“I would like to think that this demonstrates a willingness on our part to ensure that things have the ability to continue to grow and evolve,” Koetje said. “In this case, seeing that the best opportunity for our employees and customers was with ATS, we had the courage to go ahead and make that happen.”

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