Defense supplier Rheinmetall to acquire Loc Performance in $950M deal

German automotive and defense company Rheinmetall Group plans to acquire Plymouth-based Loc Performance Products L.L.C. in a $950 million deal intended to expand business with the U.S. military.

The deal, signed Tuesday and subject to regulatory approvals, brings together a pair of manufacturers with deep ties to the U.S. Department of Defense supply chain and a strong presence in Michigan.

For Rheinmetall, whose North American base is in Sterling Heights, the acquisition grows its U.S. production capabilities and provides more leverage to access more than $60 billion in U.S. Army vehicle orders, according to a news release.

"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 AG CEO Armin Papperger said in the release. "The acquisition of Loc Performance proves that we are consistently focusing on success in the USA and want to expand our share of the large market volume."

Loc Performance has grown to about 1,000 employees since its founding in 1971. In addition to its Plymouth headquarters, it operates in Lansing, Lapeer and St. Marys, Ohio.

"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," Loc CEO Jason Atkinson said in the release.

Loc builds drivelines, suspensions, track systems, rubber products, armor products and fabricated structures for U.S. military vehicles as well as the agriculture, construction, mining, locomotive, mass transportation, and oil and gas industries.

Rheinmetall supplies tracked and wheeled combat vehicle platforms for the U.S. Department of Defense and federal and state law enforcement agencies. The company employs 25,000 people across 133 locations worldwide. In 2022, it announced that its subsidiary American Rheinmetall Vehicles L.L.C. would expand its Sterling Heights headquarters.

Rheinmetall and competitor General Dynamics Land Systems Inc., which also has a large presence in Sterling Heights, were awarded prototype contracts last year for the XM30 Mechanized Infantry Combat Vehicle set to replace the M2 Bradley Infantry Fighting Vehicle.

Additionally, Rheinmetall is vying for business on the Army's Common Tactical Truck program, with competition from Mack, Navistar and Oshkosh.

The purchase of Loc gives it 1.7 million square feet of production space, modernized manufacturing and fabrication capabilities and, theoretically, a leg up in winning volume on these programs.

"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," Loc CEO Jason Atkinson said in the release.