Detroit Manufacturing Systems creating powerhouse auto supplier through acquisition

Detroit Manufacturing Systems owner and CEO Bruce Smith has reached terms to purchase a pair of competitors in a deal creating one of the largest minority-owned businesses in Michigan and the automotive industry.

Smith on Feb, 26 signed a deal — subject to regulatory approvals — to acquire metro Detroit-based Android Industries LLC and Avancez LLC, which he will fold into DMS to establish Voltava LLC, an Auburn Hills, Mich.-based company with some 5,400 employees globally and around $2 billion in yearly revenue.

The deal, which started with talks in late 2023, conjoins a key Ford Motor Co. supplier in DMS with suppliers tied primarily to General Motors Co. and Stellantis NV, creating a formidable competitor in the contract manufacturing and complex sub-assembly space.

Terms of the transaction were not disclosed.

DMS' operations include injection molding with 34 presses ranging in size from 180 to 2,500 tons.

For Smith, a manufacturing veteran with 40 years of experience, the deal catalyzes diversification efforts and forms a more resilient supplier.

“This one was fortuitous for us,” Smith told Crain’s Detroit Business. “It just gives us far more capabilities for our customers. It reduces our vulnerability in a market that’s really dynamic.”

For the sellers, a transaction with a local peer, rather than a private equity firm, is an ideal exit, said Andy Schmidt, vice president of business development at Android.

“We've been fairly choosy. We ideally didn't want it to be the investment banker type, but somebody that could help make us a better company together,” Schmidt told Crain’s. “On all fronts, it felt like a really good fit of great companies joining together to make one that's an elite partner to our customers.”

Android traces its auto industry roots back more than 50 years. CEO Kathryn Nichols joined the company in 1994, and in 2012 formed Avancez. Before the DMS deal, Nichols wholly owned Avancez, while Android was owned by a group of private investors whose identities were not disclosed.

Smith will serve as chairman and CEO of the combined company. Nichols will join in a leadership advisory role.

“… The powerful industrial logic in this transaction strengthens our ability to meet our customers’ needs while creating enhanced value across the new enterprise,” Nichols said in a news release.

DMS began in 2012 as a joint venture between trucking and auto supply entrepreneur Andra Rush and Forvia (formerly Faurecia), one of the largest auto suppliers in the world. Smith bought out Rush in 2018 and purchased Forvia’s stake in 2023.

DMS operates a 500,000-square-foot plant on Detroit’s west side, making instrument panels for its largest customer for the Mustang, Explorer, F-150 and F-150 Lightning, as well as Volvo Truck. Around 1,200 union-represented workers at the plant perform build-to-print assembly and injection molding.

Android and Avancez have historically been tethered to GM, supplying overhead systems, tire and wheel assembly, center consoles, suspension modules and other components. The suppliers also serve Ford and Android recently won a significant chunk of business from Stellantis.

Avancez is headquartered in Warren and has more than 2,800 employees at nine plants in the U.S. and Canada. Android is based in Auburn Hills and has more than 1,300 workers at 10 plants in five countries. Most of the employees at Android and Avancez are represented by a union.

Smith said DMS is in solid shape financially, and Schmidt said the same of Android and Avancez. Together, the company will be a “one-stop shop” for automakers, they said.

“So if GM or Ford or Toyota are looking for a one-stop shop and want to bundle all these services together to save money between DMS, Android and Avancez, we've got the expertise to put together the majority of their car,” Schmidt said.

Voltava would be the second largest minority-owned company in Michigan by revenue and employee count, according to Crain's data. Vinnie Johnson-owned auto supplier Piston Group still holds the top spot with $3.1 billion in revenue and 8,224 employees in 2024, according to the company.

The impact of the Android/Avancez acquisition on employees will be minimal because there is little overlap between the businesses, the company officials said. There are no immediate plans for layoffs or footprint changes.

“I say these companies were always meant to be together. It feels like a homecoming,” Smith said, pointing to Voltava’s Portuguese translation to “came back.”

Another selling point was the similar cultures of the companies. Employee empowerment and upward mobility are key priorities in running the business, said Smith, who grew up in Pittsburgh before going on to graduate from Harvard Business School and launching a career in manufacturing.

“This creates more opportunity to serve others,” he said of the acquisition. “That’s what gets me hyped.”

While financial terms are not being released, Smith said the purchase price was a multiple “well within market range.” The deal is being financed through conventional debt tools.

Palm Tree Securities LLC and CMD Global Partners LLC are serving as financial advisers to Detroit Manufacturing Systems, and Southfield-based Foster Swift Collins & Smith PC is serving as legal adviser.

J.P. Morgan Securities LLC is serving as financial adviser to Android Industries, and Detroit-based law firm Kerr, Russell, and Weber PLC is legal adviser.