German arms and automotive manufacturer Rheinmetall acquired all equity interests in the Michigan-based vehicle manufacturer, Loc Performance on 13 August 2024.
The purchase price agreed for Loc Performance, which will become due upon closing, is based on an enterprise value of $950m (€864.5m). Closing of the transaction is subject to regulatory approvals.
The strategic decision expands the Group’s business with the US military, increases its industrial base in the US and creates further access for its technologies in North America.
Furthermore, Rheinmetall is strengthening its US production capacities to target high-volume major orders for US Army vehicle programmes with a total potential of over $60bn.
Notably, Rheinmetall is one of two remaining participants, alongside General Dynamics Land Systems, in the current prototype phase of the XM30 programme. The volume is estimated at around $45bn for around 4,000 infantry fighting vehicles. In addition, Rheinmetall is participating in the Common Tactical Truck programme, which has a volume of around $16bn for 40,000 trucks.
In June 2023, Loc Performance also announced that it teamed with Estonia’s Milrem Robotics to create a prototype for the US Army’s Robotic Combat Vehicle – Light.
In addition, signs of growth appeared when the company announced a significant expansion at its facility in Lapeer, Michigan in July last year. The new resources will support Air Defence Systems for its key customer Raytheon, an RTX business, a leading supplier of defence technology.
With a skilled workforce of around 1,000 employes, Loc Performance generated significant and growing sales revenues. With its broad-based activities, 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, Michigan.
This is not Rheinmetall’s first instance of global investment. Elsewhere, the group has also acquired Expal Systems, a major munitions producer with a number of plants in Spain and a demilitarisation and soil remediation business in the US. This deal, struck in August 2023, is intended to support the company’s efforts in meeting the heightened demand to expand its position as one of the largest ammunition and armament providers to Nato armed forces.
Earlier in 2024, Rheinmetall also gained a 51% stake in the South African plant engineering and chemical applications company, Resonant Holdings.
