By Ryan Beene, Crain´S Detroit Business
Brighton, Michigan -- NewNorth llc, a Brighton-based start-up firm, hopes to make its first acquisition in April for what chief executive officer Jeff Steiner hopes will be a sustainable company generating $500 million to $750 million in annual sales in five years.
Steiner, a former vice president of consumer research and product development at Johnson Controls Inc.; and partners Rande Somma, NewNorth chairman; and Nate Young, chief creative officer, are targeting manufacturing companies that generate $50 million to $250 million in annual sales for acquisition. All three have held senior positions in the automotive division of JCI.
The goal is to have a diversified interiors products company that serves a variety of markets, such as off-highway vehicles, commercial trucks, office furniture and other "static interior" markets that need innovative products.
With private equity and other investors backing NewNorth, Steiner says his goal is to take control of companies with Somma and Young that they see as promising, but in need of new leadership and a turnaround.
"Our call to action is for companies that would like to work with us to help rebuild this manufacturing prowess here in the Midwest, with a focus on the broad interiors market serving non-automotive," Steiner said.
Brian Demkowicz, managing partner of Detroit-based Huron Capital Partners, says while 2008 and 2009 will be tough years because of the ailing economy, the market being targeted by NewNorth could be promising further down the road.
"Generally, the manufacturing environment in Michigan is stronger than people have given it credit for," he said. "I would say that below [troubled large firms] there is a very vibrant middle market that continues to grow."
Steiner, Somma and Young have worked for a number of companies since their time together at JCI ended earlier in the decade, and they noticed a trend that spurred their new venture.
"There is a tremendous gap in leadership that is out there, particularly in the small and midsize companies where they're in need of a number of things," Steiner said.
"There's a fair chunk of them that have forgotten how to be innovative in terms of their products and their overall processes."