Rheinmetall AG officially closed on its $950 million purchase of Loc Performance Products, LLC on Nov. 29, a move aimed at strengthening the Düsseldorf-based vendor's hand in the United States' ground vehicles market, according to a Monday announcement.
The takeover, first reported by Breaking Defense, was initially announced in August. American Rheinmetall Vehicles, a subsidiary of Rheinmetall based in the United States, will manage the acquired company.
“The acquisition of Loc Performance Products proves that we are consistently focusing on success in the USA and want to expand our share of the large market volume,” Armin Papperger, chairman of Rheinmetall’s executive board, said in a statement.
American Rheinmetall named two Army ground vehicle programs in its announcement that could yield an eventual $61 billion payday for the company: It is a finalist for the Army’s XM30 prototype competition, the Bradley replacement program previously known as the Optionally Manned Fighting Vehicle, and it’s competing for the Common Tactical Truck program, according to the release.
The XM30 competition, between Rheinmetall and General Dynamics Land Systems, is worth $45 billion for around 4,000 vehicles, according to Rheinmetall. The CTT program is valued at $16 billion for around 40,000 tactical trucks, the release says. Rheinmetall submitted a joint bid with GM Defense in February to compete against Oshkosh Defense, Mack Defense and Navistar in the initial phase of the program.
“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,” Papperger said in his statement.
American Rheinmetall was also recently named as a competitor in the second increment of the Small Multipurpose Equipment Transport, or S-MET, competition in September, as well as for a series of self-propelled howitzer performance demonstrations that were set to kick off in November.
Loc Performance has 1,000 “highly qualified employees,” the release says. Papperger said the company has a sustainable business model, a ready-made workforce and it “offers us ample capacity reserves for the targeted orders in the USA. We can thus realize 100% local value creation in the USA.”
Loc Performance is headquartered in Plymouth, MI, with satellite locations in Lansing, MI, Lapeer, MI, and St. Mary's, OH. The acquired company hands Rheinmetall an additional 160,000 square meters of production space “with considerable capacity for future expansion,” the release says.
American Rheinmetall is based in Sterling Heights, MI, about 40 miles northeast from the Plymouth headquarters.