Rheinmetall acquires Loc Performance to boost US manufacturing capabilities

Rheinmetall's acquisition of Loc Performance is intended in part to support its offerings for the US Army's XM30 (a variant of the Lynx armoured vehicle shown above) and CTT programmes. (Rheinmetall AG)

Rheinmetall has finalised an agreement to acquire US vehicle specialist Loc Performance Products, headquartered in Plymouth, Michigan. The purchase price of USD950 million is based on its enterprise value, Rheinmetall said in a 14 August statement. Closing is subject to regulatory approvals. A Rheinmetall spokesperson declined to provide further details on the schedule.

Loc Performance has total capacity for potential annual sales of USD650 million, with earnings before interest, taxes, depreciation, and amortisation (EBITDA) of up to 18%, according to slides dated 14 August provided to Janes by a Rheinmetall spokesperson. The acquisition is being financed through debt, with the financing structure to be finalised at closing based on the “prevailing market conditions”, according to the slides.

The acquisition would expand Rheinmetall's business with the US military, increase its US-based industrial capabilities, and create additional access for its technologies in North America, according to the statement.

Loc Performance is a full-line supplier of drivetrains, suspensions, track systems, rubber products, armour products, and fabricated structures for civil and military customers, as well as structures and components for missiles. It is the original equipment manufacturer (OEM) for most US military ground vehicle track systems, Rheinmetall said. Manufacturing capabilities include modernised fabrication, machining, and welding technologies that can meet the requirements of the US Army's XM30 infantry fighting vehicle (IFV) and Common Tactical Truck (CTT) programmes, the statement said. Loc Performance has three sites in Michigan and one in Ohio with an available manufacturing footprint of around 1.7 million ft ² (158,000 m ² ), providing capacity for future expansion.