Private Equity Meets Engineering: Eurocircuits Becomes The Centerpiece Of A Long-Term Strategy

What happens when founders decide legacy matters more than an easy exit? I sat down with Eurocircuits’ Founding Partner Dirk Stans to unpack a deal that keeps the company’s engineering DNA intact while unlocking the resources to scale. Instead of becoming the 'fifth wheel' of a sprawling industrial group, Eurocircuits becomes the strategic core of a new platform—built around its digitally native approach, dense customer orchestration, and hard-won process IP.

Dirk and I explore the road to the partnership with Avedon Capital Partners: early talks with industrial buyers who didn’t quite grasp the uniqueness of the model, a healthy skepticism about private equity, and then a meeting with a team whose long-term thesis matched the founders’ own plan. This isn’t a three-to-five-year flip. It’s long-horizon thinking that respects continuity for 750 employees and thousands of customers. Day one, nothing breaks: management stays, customer interfaces stay, supplier relationships stay. What changes is pace, ambition, and the confidence to start a multi-year strategy knowing a thoughtful handover is built in.

We also dig into why private equity is active in EMS despite modest EBITDA margins. Many EMS firms are self-financed and generate steady cash, and the category offers predictable mid-single-digit growth. But Dirk argues the essential point: finance should serve technology, not lead it. The real job isn’t trading components; it’s building reliable electronics with deep process understanding. That focus has kept Eurocircuits ahead, and with aligned capital, they aim to scale without losing what makes them special. If you care about succession, platform-building, and keeping engineering at the center of manufacturing, this conversation offers a clear, practical blueprint.

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EMS@C-Level is hosted by global inspection leaders Koh Young (https://www.kohyoung.com) and Global Electronics Association (https://www.electronics.org)

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Transcript

Philip Stoten, Journalist and Podcast Host 0:09

From my house to yours, welcome to EMS at Sea Level. I am joined by Eurosircuit's founding partner, Dirk Sands. We've chatted many times, Dirk Dirk, and it was um exciting to see your news come across my desk about the partnership with is it Avaddon Capital Partners? Um big news, big news for you, big news for the business. Let's start by just exploring what you know how you found each other um and kind of what that means to the business going forward.

Industrial Buyers Versus Fit

Rethinking Private Equity

Eurocircuits’ Founding Partner Dirk Stans 0:40

Well, how I found uh Avaddon is is is kind of a long story. It started with uh when um as founding farmers uh founding fathers of a company um you think about the long-term uh future of your company, and uh as every uh father dreams uh of the family taking over the younger generation taking over. In our case, it became clear two years ago that that is not the case. So um then you start to prepare your company for um an external turnover, somebody who takes it to the to the future and and can share this long-term future. And uh our initial dream of Luke and my was uh that um oh let's uh hope to find an industrial group um because we also have an industrial uh strategy, and uh and our feeling was that uh those people are the only ones in the market who have a long-term vision. But um we we we came to um meet and talk to some of these people. First of all, I was surprised that uh so few people uh really realize uh what we are doing, and that we are really uh uh a sheep with another color and uh and and and and hardly doing uh anything close to what the other EMS and PCB manufacturers are doing. So, first of all, that was uh that was interesting uh to see. Um, and although we are in the market for already so many years, you know each other, and uh and and and and yet there was so little knowledge. Uh second is that um from the industrial part of view, uh the philosophy was always okay, uh Eurosirkus is interesting because the huge number of customers, because the the specific uh intellectual property that we created, how to deal with those many customers, many orders. But then again, if you think about long-term strategy, um um in terms of long-term strategy, Eurosirkus has a small part in the big industrial group, it always goes away in the bigger strategy of the bigger group, you know. And then you are like uh fifth wheel on the wagon. And if you then think about uh private equity, of which uh were also in touch with us um uh quite a lot, then uh we had this uh look in eye and presh, we had this typical negative idea about uh private equity. Uh, these are the shocks of the markets uh that will uh strip you uh down and then uh sell you again for a lot of times, yeah. And um, and then we came across um across Avaddon and um they came with a with a well-prepared uh strategic uh document, uh and they have been preparing um uh their market entry for uh for quite uh for quite some time already uh with the consultants and um and the strategy or the the vision that came out of this uh document uh was more or less the same as that Luke and I had for the for the last years and and what what should be done with with the company in this market and so on. Um so that was um that was a very pleasant surprise. And also um the the way that these people think about uh long term, they they don't think in three to five years at all, they always think one step ahead. Because um even if you invest in companies, you always have to think about what's next for for uh for the next people that might be interested. And uh and then and then you create a whole new view on on the on long term. And uh and if you if you have to decide to um what to do with your company and uh and bring it into an industrial group as a fifth wheel on the wagon, or uh make it the center point of the future strategy and a whole new group being built around it, then uh then the choice is easily made. So uh for the 700 people 750 people working for our group, I think it's uh it's a much smarter strategy of uh taking those 750 people in the midst of the strategy and not uh dangling dangling at the end of the strategy somewhere else in the in the big industrial concern.

Choosing To Be The Centerpiece

Philip Stoten, Journalist and Podcast Host 5:40

Yeah, it makes sense. It's a it's a kind of it feels like a meeting of minds, but it feels like actually having Eurosirkus, which is a unique business. You know, we've spoken many times, and it feels like it's far from being a Me Too um EMS in the in the industry, it's far from being a Me Too design company, it's far from being a Me Too PCB company, it's quite a unique digitally native operation that you've created. And to make that the centerpiece of a new strategy seems very smart. And it's almost like if you guys sat down and said, okay, well, we've got we've got you know a bottomless checkbook, what would we do? That's what private equity brings to the party, isn't it? It's the ability to look forward and say, how do we scale this business for the next five years? And how do we resource that scaling at the same time? And resourcing it's so important.

Eurocircuits’ Founding Partner Dirk Stans 6:35

Yeah, well, last Friday I rephrased it to uh one of your colleagues, uh, a little bit different, but it comes down to the same thing. It's like uh okay, uh Paris, Luc, and I, we are all in our 60s. Um, and and for the moment we we are not in in in uh in in lack of money, but in lack of courage of uh of of starting a new long-term strategy now, uh, because we will we will see the end of that when we are 70 or even past that. So uh but in this in this new setup, uh you you you can feel like 40 again, because uh you know that that you only have to start it and uh and halfway you can hand it over to uh to the new generation then. Uh it's it's up to them to to take it further. And uh and and that without saying goodbye, because you can still uh remain involved, you're still you're still uh co-responsible because we do we do remain shareholder and that uh so you you you remain involved in the in the whole thing going forward, and uh that is nice, yeah.

Philip Stoten, Journalist and Podcast Host 7:47

Yeah, and who better to guide the business you built and transfer that information to the 750 people that you've employed than than the founders of the business? Your value add at this stage is really critical. It's just a different world to when you started it and you were bootstrapping the business and you were doing everything yourself now. It's how do we how do how do you and the partners multiply your vision? What's the response been like to customers when they've read the news and how have you kind of um explained?

Founders’ Role And Energy

Eurocircuits’ Founding Partner Dirk Stans 8:18

Until now we have uh we have communicated rather openly to everybody, of course. And um, and the response is very positive because in uh in the operational part of our business, nothing changes. The executives stay remain, the management stays remain, the structure of the companies with uh where the comp where the customers deal with, the suppliers deal with, everything stays the same. So um there is not much to tell on that uh on that level.

Philip Stoten, Journalist and Podcast Host 8:52

Yeah, I mean that makes a huge difference, isn't it? And when you look at your role going forward as founding partner and your partner's role as the kind of original um visionaries behind the business, where do you see that you're adding the most value and how have you shared those ideas with um with your new partners?

Eurocircuits’ Founding Partner Dirk Stans 9:12

Well, first of all, uh Philip, in this new setup, who would be there to talk to you? Absolutely.

Philip Stoten, Journalist and Podcast Host 9:20

And that's important.

Customer Reassurance

Staying Strategic While Handing Over

Eurocircuits’ Founding Partner Dirk Stans 9:22

That is already one, and um and no, I think I don't think it's it's so simple to um to uh to replace the strategical thinkers from uh one day to the next, and that is also so uh nice about the setup because um whether we we got a partner on board or not uh didn't really change our philosophy of uh Paresluk and me because uh well in view of our age, we we we need to prepare the future anyway. I'm I'm not going to work until I'm 75. Well maybe I do, but then uh not at the same pace of what we do. Maybe not every day. Yeah. And uh and and and that is something that that you need to do and prepare anyway. And uh and in in this setup, you are reminded that you have to do that. Uh so it's one of your responsibilities, uh, and uh in which you get help, and that is uh that is nice because if you are not reminded of this uh regularly, you might forget about it and uh and and go on in this uh convenient situation. But uh since since um this convenient situation is uh is is not there as if as it would be when you are alone, uh and and I like that you are you're pushed to uh to achieve goals, which I like because otherwise you're sitting there evolving on your merits of the past, and uh but that is not good for anybody. You you need to, I mean, we are already a long time um in the in the in front of the market, and uh to keep in front of the of the platoon, uh you you need to uh run fast or cycle fast and move fast. So so um you need to keep on doing that, and that is that is nice because uh you know you know that at some point there will be a handover, and when it is, it doesn't really matter if it's two years, three years, five years, who cares, as long as you as you are in the situation of yeah, of sharing the vision as you go there.

Why PE Likes EMS

Philip Stoten, Journalist and Podcast Host 11:35

Yeah, yeah. I mean it sounds like you've nailed both the the transition for the business, but also the succession planning, which is kind of how this whole process starts, thinking about you know what the next what the next leadership phase of the business is, and you want the business to to be in good hands. What I think is interesting, Doug, when we look even over the last three or four years, there's been a robust interest from private equity in the in the MS industry. It gives you some confidence, you know, maybe not so much in on the PCB side, and you know, we we've been to you and I have both been to many events where there's lots of crying and weeping going on in certain sectors of the industry about the way uh about the way the market is, but there's been a robust interest from PE. Does that really be that you know manufacturing and well-performed contract manufacturing is actually a good place to be?

Eurocircuits’ Founding Partner Dirk Stans 12:33

Well, I I um I asked myself the same question, and uh I was on one of the seminars uh from Dieter Weiss and there uh Simon Meyer, uh who is a banker and an uh an MA specialist, he explained it in a in a very clear way. I think it was uh two years ago on the first um seminar that uh Dieter gave, and uh he said, you know, why is is uh private equity interested in in the EMS, although they have such um let's say low ebidas to show for imagines, yeah. Yeah, and that is that um the most of these businesses are uh self-financed. So uh if if you take over uh such an EMS company, you don't have to put extra money in it to to make it going and to achieve the goals that are already lying on the table. So it's an all-to-financing uh business and it's secure money on the bank in that respect. And if you combine that with uh let's say a projective growth of uh six and a half to seven percent for the next 10 years, it is uh it is not a daft investment. It's not the best, it's not the it's not the best, but it's a it's a steady, it's a steady investment that that these people uh can uh can realize. So uh yeah, yeah.

Models, Scale, And Differentiation

Philip Stoten, Journalist and Podcast Host 14:01

Steady KAGA, um solid, solid asset base, fairly predictable, fairly predictable future, and as you say, fairly solid cash generation. So um and that you know that allows you to look at building groups and um strategies that do allow you to scale if you start with the right business. And I think that's that's the key in these situations to have a have a good business to start with, have a good philosophy that is maybe a little bit different. I spent a lot of time over the last two years thinking about what the perfect TMS model is, and I finally realized probably about six to nine months ago that there isn't one. There's maybe six or seven really interesting different models, and they all work in different ways. But if you've got a model that is that does kind of stand out and isn't just me too, and isn't just scale and price, then you know there's there's a lot that can be done for it. And if you can bring like-minded businesses and like-minded people together, the opportunity to scale is exciting. So the future of Euro Circuits is both assured but also is is fascinating. It's gonna be interesting for you and your partners to um yeah, to be part of it, but also to spectate the future.

Eurocircuits’ Founding Partner Dirk Stans 15:18

And the big advantage that uh we had and uh have already over uh over other companies, because uh the whole thing going on in the EMS business also has a disadvantage, and that is that everybody is too much busy with the financial side of things. But but uh in the end, we are all technical industrial companies. So the first thing you need to take care of is the technology of your company and the technical technological understanding, and and that is something that is uh somehow forgotten in this whole uh in this whole thing, and we have always put it in the very midst of what we are doing, technical understanding first, and then comes the rest, because in the end your customer is also very technical, so uh, and that is sometimes forgotten in this whole picture. Yeah, everybody some sometimes when I when I read these articles about EMS, then uh Dieter and I joke about it sometimes. I said uh these people are just uh component distributors. The only thing is that they are very sad that they still need to solder the component on the circuit board before they can resell it. Yeah, yeah. But but but in the end, it's the soldering of the component on the on the circuit board, which is the which is the primary goal of these companies. And uh and and we should never forget that. That's the that's the first thing, that's the first priority. Yeah.

Closing And Congratulations

Philip Stoten, Journalist and Podcast Host 16:52

Yeah, we have to go back to that engineering call. That's absolutely key. Well, congratulations again uh on having a great succession plan and having an exciting future. The only thing I'm not sure about is that your age really starts with a six. Uh, I thought you were younger than that, so congratulations on that as well. Thank you. And I really look forward to 63. I'm sorry to say. So there you go. And I really look forward to next time we meet together in person. But in the meantime, thanks so much for talking to me. You're welcome, Philip.