On 13 August 2024 Rheinmetall signed an agreement to acquire all equity interests in Plymouth, Michigan-based vehicle specialist Loc Performance Products.
Rheinmetall noted that the acquisition strengthens its offering in the field of land vehicles while expanding the group’s business with the US military, increasing its industrial base in the United States and creating further access for its technologies in North America.
The acquisition also strengthens Rheinmetall’s production capacities in the United States with a view to targeting high-volume major orders for US Army vehicle programmes with a total potential of over USD 60 billion (EUR 54.4 billion). Rheinmetall is one of two remaining participants in the current prototype phase of the XM30 programme, which is intended to provide a new generation of infantry fighting vehicles (IFVs) to replace the M2 Bradley. The value of this programme is estimated at around USD 45 billion for around 4,000 IFVs.
Furthermore, Rheinmetall is participating in the Common Tactical Truck (CTT) programme, which has a value of around USD 16 billion for around 40,000 trucks.
Rheinmetall expects the acquisition of Loc Performance to bring considerable benefits for both its US and global business. “For example, an experienced workforce with a high level of technical expertise – including in the maintenance, repair and combat enhancement of military combat vehicles – will be integrated into Rheinmetall’s internal supply chains,” the company noted.
The purchase price agreed for Loc Performance, which will become due upon closing, is based on an enterprise value of USD 950 million. Closing of the transaction is subject to regulatory approvals.
With its skilled workforce of around 1,000 employees, Loc Performance 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, Michigan.
Founded in 1971 in Plymouth, Michigan, Loc Performance Products is a diversified full-service provider for both military and civilian customers. In addition to its headquarters in Plymouth, the company has further locations in Lansing and Lapeer, both also in Michigan, as well as St Marys in Ohio.
Loc Performance is a high-performance full-line supplier of drivetrains, suspensions, track systems, rubber products, armour products and fabricated structures for vehicle platforms. The company is an established supplier to the US government and, in particular, the original equipment manufacturer for most military ground vehicle track systems in the United States. In addition, the company’s products are used by major vehicle manufacturers in the agricultural, construction, mining, locomotive, transportation and oil and gas industries.
Loc Performance’s current manufacturing capabilities include modernised fabrication, machining and welding technologies capable of meeting the critical manufacturing requirements of the US Army’s XM30 and CTT programmes. An available manufacturing footprint of 1.7 million ft2 provides significant capacity for future expansion.
“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,” Rheinmetall CEO Armin Papperger was quoted as saying in a company press release. “The acquisition of Loc Performance proves that we are consistently focussing on success in the USA and want to expand our share of the large market volume. Everything speaks in favour 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.”
Matthew Warnick, CEO of American Rheinmetall Vehicles, added, “In the USA, we have a promising position in two major military projects, both in the XM30 infantry fighting vehicle programme and in the CTT project. The acquisition of Loc Performance gives us the manufacturing readiness that will enable us to realise the major orders we are aiming for. This puts us in a position to realise 100% local value creation in the USA.”
Loc Performance CEO Jason Atkinson stated, “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.”
