15 November 2022

Rheinmetall to buy ammo maker Expal Systems

by Marc Selinger

Expal Systems' products include the EC-102 artillery fuze. (Expal Systems)

German defence contractor Rheinmetall Group has agreed to acquire Spain-based ammunition manufacturer Expal Systems to expand its production capacity and product offering in an area poised for fast growth, the buyer announced on 14 November.

With many NATO countries boosting their defence budgets in response to Russia's invasion of Ukraine, Rheinmetall believes that taking over Expal could help it secure much of the additional spending.

“Given the expected large increase in demand from numerous nations, Rheinmetall wants to position itself as strongly as possible to address the anticipated inflow of new requests for tender for ammunition purchases,” Rheinmetall said.

Rheinmetall will gain such products as naval artillery munitions, artillery and mortar fuzes, and rocket motors. It will also pick up six operational locations in Spain and one in the US, and will add 789 employees to its workforce. While Expal expects to generate sales of about EUR400 million (USD413 million) in fiscal year (FY) 2022/23, it has the capacity to increase its annual sales to EUR700–800 million, Rheinmetall said.

Rheinmetall, which has not finalised the financing structure for the deal, would buy Expal from MaxamCorp Holding of Madrid for a purchase price that is based on an enterprise value of EUR1.2 billion. Rheinmetall seeks to complete the transaction in the summer of 2023 after receiving regulatory approval.

Expal and Maxam had no immediate comment on the announcement.

The acquisition news came 10 days after Rheinmetall and Hungarian information technology (IT) integrator 4iG announced that they have formed an IT joint venture (JV) in Budapest. The JV, which is called Rheinmetall 4iG Digital Services (R4), will initially focus on providing IT services to Rheinmetall's subsidiaries.

German defence contractor Rheinmetall Group has agreed to acquire Spain-based ammunition manufacture...

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