JCB, the Midlands digger maker, has acquired German-based Vibromax Compaction Equipment for an undisclosed sum.
The company will become JCB Vibromax and will be managed by local management in Germany and North America.
Production will continue at the existing factory in Gatersleben near Leipzig.
Vibromax employs around 170 people worldwide and manufactures approximately 2,500 machines a year.
The acquisition is expected to be completed in early September, subject to regulatory approvals.
John Patterson, managing director and chief executive of JCB, said: "There is a great deal of synergy between JCB and Vibromax."