Middleville Tool & Die takes on investment partner
After doubling manufacturing space in 2014, company readies for sustainable, controlled growth.
Just prior to the close of 2016, family-owned Middleville Tool & Die made a significant decision; the company signed an agreement with an investment partner to help support its growth going forward.
The Bayer family is located on the east side of the state and operates a series of metal working businesses, including Bayloff Stamped Products.
Jeff Cope, vice president at Middleville Tool & Die, said Middleville Tool & Die has been experiencing significant growth in recent years and needed a way to support this growth going forward.
In 2014, Middleville Tool & Die expanded its manufacturing space from 60,000 square feet to 120,000 square feet. Since that time, it has grown from 130 employees to 260, and since 2012, the company has increased sales by 250 percent.
“We’ve brought in a capital partner to help continue to fund that growth, so we could maintain a conservative financial position,” Cope said.
Cope said the Middleton family, which owns Middleville Tool & Die, recognized a need for a seasoned executive team, and in 2014, it hired outsider Bill Blanton to serve as president and CEO and asked Blanton to pursue an investment partnership that could help meet its strategic goals.
“We see a pretty significant amount of growth that we are committed to over the next two years,” Blanton said. “Raising the capital secured the ability to execute on that.
“The reason why we wanted to do that and take a financially conservative approach is because the other thing you are always worried about mitigating is a downturn or flattening in the industry. You always want to be prepared for that. When you are a company that is growing extremely fast like Middleville was, you have to be thinking about that and making sure you don’t get in a leverage situation.”
Blanton said Middleville Tool & Die is committed to being an engineered solutions provider and wants to position itself for sustainable and controlled growth going forward.
He noted a 250 percent sales increase over a four-year period and doubling business in two and a half years is not sustainable in the long term.
Cope said what was attractive about the Bayer partnership is the similarities of the two companies.
He said both companies are family owned and have second and third generation family involvement. They also share the same “core values.”
When Middleville Tool & Die was first founded in 1966, the company focused exclusively on tool and die work. As second and third generation family members have joined the business, they added metal stamping services and began developing proprietary technology, which is the reason for the company’s rapid growth.
“At one time, Middleville was more of a stamp and ship operation, where you have an operator running a press and that press makes parts that are packaged and shipped to customers,” Blanton said. “Now, we are making more complex welded assemblies. Not only are components being stamped on the press, but they are going to a secondary operation to have more value-add put into the part, then going to a welding operation and, potentially, having several steps done there.”
Middleville Tool & Die offers a wide array of welding services, including MIG, TIG, plasma and laser welding.
“We’ve added a number of automated robotic weld cells,” Cope said. “What is interesting about Middleville is that we are a mid-market company but have this diverse welding technology.”
Cope said the biggest challenge Middleville Tool & Die faces is finding the employees it needs to keep up with its growing business.
“The value-add content drives the growth and the employees you need,” Blanton said.
He said the company has been hiring different types of engineers, new build and die maintenance positions and shop floor technicians, among others.
Cope said the company is very focused on recruiting young people into the business and plans to offer more co-op opportunities to help potential employees gain experience while they still are getting their education.
Middleville Tool & Die primarily serves the auto and office furniture industries, and Cope said while some of the recent announcements from auto companies related to investments in Michigan and the United States are good news for the company, it also could present challenges related to being able to find enough employees to do the increased work.
“Overall, I think it’s a positive effect. A lot of those jobs that may have been going elsewhere will be staying here in the Midwest, and if an OEM is producing parts closer to us, it certainly creates more opportunity for us,” Cope said.
“But it also creates challenges too, with the biggest challenge being the skills gap. What the president is trying to do is fantastic, but he has to think about if those jobs are staying or being created, how are we going to scale that as far as developing the technical expertise to do those jobs? That is the other piece of it.”
Despite challenges, Middleville Tool & Die believes it has a bright future ahead of it and having an investment partner will keep the company on solid footing.
“The growth that we’ve been experiencing, we expect it to continue,” Cope said.