Strategic acquisition in the USA: Rheinmetall agrees takeover of vehicle specialist Loc
Performance Acquisition expands and strengthens Rheinmetall’s position in North America and the competition for high-volume major orders in the USA With a strategic acquisition in the USA, the Düsseldorf-based Rheinmetall Group is expanding its position in the world’s largest defense market and strengthening its core business in the field of land vehicles for military customers worldwide.
On August 13, 2024, Rheinmetall signed an agreement to acquire all equity interests in Loc Performance Products, LLC, a renowned vehicle specialist based in Plymouth, Michigan.
The acquisition expanded the Group’s business with the US military, increased its industrial base in the USA, and created further access to its technologies in North America. Furthermore, Rheinmetall is strengthening its production capacities in the USA to target high-volume major orders for US Army vehicle programs with a total potential of over USD 60 billion. Rheinmetall is one of the two remaining participants in the current prototype phase of the XM30 program. This program serves to introduce a new generation of infantry fighting vehicles. The volume is around USD 45 billion for around 4,000 infantry fighting vehicles. Furthermore, Rheinmetall is participating in the CTT (Common Tactical Truck) program, which has a volume of around USD 16 billion for around 40,000 trucks.
In addition, Rheinmetall 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—including in 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 closing, is based on an enterprise value of USD 950 million. The transaction’s closing is subject to regulatory approvals.
With its skilled workforce of around 1,000 employees, Loc Performance generated significant and growing sales revenues. With its broad-based activities, the company will directly contribute to the Rheinmetall Group’s fast-growing US military vehicle business, managed by American Rheinmetall Vehicles based in Sterling Heights, MI.
The acquisition provides the Rheinmetall Group with key capabilities in the US. It enables American Rheinmetall Vehicles to supply the US Department of Defense more effectively and comprehensively by expanding the company’s product portfolio and domestic manufacturing capabilities. The 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 and has highly skilled work.