Rheinmetall announced it had signed an agreement to acquire all equity interests in Loc Performance Products, a renowned vehicle specialist based in Plymouth, Michigan.
This acquisition expands the group’s business with the US military, increases its industrial base in the USA, and creates further access to its technologies in North America. Rheinmetall is strengthening its production capacities in the USA with a view to targeted high-volume major orders for U.S. Army vehicle programs with a total potential of over $60 billion.
Rheinmetall is one of the remaining participants in the current prototype phase of the XM30 program, which introduces a new generation of infantry fighting vehicles. The program’s volume is about $45 billion for around 4,000 infantry fighting vehicles. Rheinmetall is also participating in the CTT (Common Tactical Truck) program, which has a volume of around $16 billion for around 40,000 trucks.
Rheinmetall also expects the acquisition of Loc Performance to bring considerable benefits to its American and global businesses. For example, an experienced workforce with a high level of technical expertise—which includes the maintenance, repair, and combat enhancement of military combat vehicles—will be integrated into Rheinmetall’s internal supply chains.
The purchase price agreed for Loc Performance—which will become due upon the deal’s closing—is based on an enterprise value of $950 million. The closing is subject to regulatory approvals.
With a skilled workforce of around 1,000 employees, Loc Performance generated significant and growing sales revenues. The company will make a direct contribution to the Rheinmetall Group’s fast-growing US military vehicle business, which is managed by American Rheinmetall Vehicles, based in Sterling Heights, MI.
This acquisition provides the Rheinmetall Group with key capabilities in the US. It enables American Rheinmetall Vehicles to effectively and comprehensively supply the US Department of Defense by expanding the company’s product portfolio and domestic manufacturing capabilities.
This investment follows Rheinmetall’s clear strategy for growth in the United States, which will be an important core business for the Group in the future. Loc Performance is already pursuing a sustainable business model with robust organic growth, has a highly skilled workforce, and offers the Rheinmetall Group capacity reserves for targeted orders in the USA.
Loc Performance Products was launched in 1971 in Plymouth, MI, and is a diversified full-service provider for military and civilian customers. In addition to its headquarters in Plymouth, Michigan, the company has locations in Lansing and Lapeer, Michigan, and St. Marys, Ohio.
The vehicle specialist is a high-performance full-line supplier of drivetrains, suspensions, track systems, rubber products, armor products and fabricated structures for vehicle platforms. And the company is an established supplier to the US government and OEM for most military ground vehicle track systems in the USA. Major vehicle manufacturers use the company’s products in the agricultural, construction, mining, locomotive, transportation, and oil and gas industries.
Loc Performance’s current manufacturing capabilities include modernized fabrication, machining and welding technologies capable of meeting the critical manufacturing requirements of the US Army’s XM30 and CTT programs. And an available manufacturing footprint of 1.7 million square feet offers significant capacity for future expansion.
American Rheinmetall Vehicles offers US customers with next-generation tracked and wheeled combat vehicles and tactical wheeled vehicle platforms. And American Rheinmetall Vehicles supports the U.S. Army in two major modernization programs, the XM30 Combat Vehicle program, and the CTT program.
This acquisition will benefit American Rheinmetall Vehicles as the company expands and strengthens its presence in the United States. With the purchase, American Rheinmetall Vehicles acquires 1.7 million square feet of modern, efficient manufacturing space with significant capacity for future expansion.
American Rheinmetall is also supporting the Department of Defense in key modernization programs of national significance that directly improve the effectiveness, mobility, and situational awareness of soldiers on the battlefield. And this includes developing and delivering next-generation products and capabilities, including advanced direct and long-range precision fire weapons, innovative tracked and wheeled combat vehicle platforms, and intelligent mission systems.
The American Rheinmetall family includes American Rheinmetall Vehicles in Sterling Heights (Michigan) and Troy (Michigan), American Rheinmetall Munitions in Stafford (Virginia), Windham (Maine), and Camden (Arkansas), American Rheinmetall Systems in Biddeford (Maine) and the parent company American Rheinmetall Defense in Reston (Virginia).
KEY QUOTES:
“We are making this investment because we have a clear strategy for growth and the United States will be an important core market for us in the coming years. The acquisition of Loc Performance proves that we are consistently focusing on success in the USA and want to expand our share of the large market volume. Everything speaks in favor of this acquisition: Loc Performance is already pursuing a sustainable business model there with robust organic growth, has a highly qualified workforce and offers us significant capacity reserves for the orders we are targeting in the USA.”
- Armin Papperger, CEO of Rheinmetall AG
“In the USA, we have a promising position in two major military projects, both in the XM30 infantry fighting vehicle program and in the CTT project. The acquisition of Loc Performance gives us the manufacturing readiness that will enable us to realize the major orders we are aiming for. This puts us in a position to realize 100% local value creation in the USA.”
- Matthew Warnick, CEO of American Rheinmetall Vehicles
“The significant engineering capabilities of American Rheinmetall Vehicles and the next-generation technologies that are part of the exceptional global Rheinmetall Group are a great fit with Loc Performance’s 53 years of manufacturing experience in the United States. I am excited about this combination, which represents a powerful end-to-end solution that will bring even better products to our customers and even more growth to our combined company.”
- Jason Atkinson, CEO of Loc Performance
