DETROIT -- Platinum Equity LLC, a California private equity firm controlled by Detroit Pistons owner Tom Gores, said it has merged two of its Michigan automotive suppliers.
Diversified Machine Inc. and SMW Automotive Inc., both under the Platinum Equity portfolio, are now Chassix Inc., Platinum said in a statement on Tuesday.
Robert Remenar, CEO of Diversified Machine and former CEO of Nexteer Inc., will be the CEO of Chassix.
Remenar said Chassix is signing a lease for a new headquarters in Southfield, Mich., and will move in June.
The move vertically integrates the two suppliers’ product lines of casting and machining, with plants in Michigan, Indiana, Ohio, Wisconsin, Georgia, South America, Europe and Asia.
Chassix employs 3,600 worldwide, including 1,200 at 10 locations in Michigan. Remenar said the supplier will hire about 200 people in Michigan over the next 12-24 24 months.
Diversified Machine and SMW generated combined revenue of $1.2 billion last year, but Chassix is expected to increase that by $200 million to $300 million, Remenar said.
Chassix plans to spend roughly $96 million, or 8 percent of revenue, to expand its business, he said.
“We’re expanding our capabilities; our capital spending is double that of our competitors’,” he said. “Our owners are doubling down on this business.”
Reason for departure
Despite reports that Remenar left Nexteer nine months ago over a compensation issue, his departure actually took place to lead the combination of Diversified Machine and SMW, he said.
He formed a relationship with Platinum Equity and Tom Gores during the bankruptcy of Delphi Corp. more than six years ago. Remenar was then leading Delphi’s steering division and was trying to orchestrate a sale of the division to Platinum, he said.
In 2009, Gores made an unsuccessful $3.9 billion bid to buy Delphi’s entire operations.
“I’ve known the Platinum guys for six years, and every time they’ve looked at an automotive asset, they contacted me,” Remenar said. “The plan was to buy the two (Diversified Machine and SMW) and combine them, so they called me and appealed to me to run the place.”
Gores acquired Diversified Machine through his equity firm in December 2011. Platinum bought the supplier from The Carlyle Group, a private equity firm, which had formed the supplier with assets from bankrupt UniBoring Inc. in 2005. In 2011, Bloomberg reported that Diversified Machine sought $235 million in loans to back the sale to Platinum.
Platinum acquired SMW Automotive in January 2012.
The firm also owns Acument Global Technologies Inc., a metal-fastener manufacturer that Platinum bought in 2006 for $630 million from Textron Inc.
In January 2010, Platinum acquired Michigan boat manufacturer Four Winns LLC as part of a $70 million deal for the assets of bankrupt, Minneapolis-based Genmar Holdings Inc.
In 2009, Gores bought the automotive wire harness and electronic systems supplier AEES Inc. for an undisclosed sum from Alcoa Inc.