Carborundum Universal-led Germany arm to acquire 100% stake in RHODIUS Abrasives at Rs464cr

3 Feb 2022 , 02:47 PM

CUMI Abrasives GmbH, Germany, a step down wholly owned subsidiary of Carborundum Universal Limited (CUMI) has entered into a binding Share Purchase Agreement to buy 100% stake in RHODIUS Abrasives, Germany (RHODIUS) on February 02, 2022 at an Enterprise Value of 55 million Euros (Rs464cr indicative). The transaction is expected to be completed by the end of March 2022.

Talking about the acquisition, N. Ananthaseshan, Managing Director of CUMI said, “RHODIUS has over seven decades of experience manufacturing high-performance grinding and cutting consumables for machining of metal and stones. RHODIUS brings in a vast and innovative product line up with various patented benefits that create unique selling opportunities.

RHODIUS is a strong proprietary brand with great reputation and has long-standing dealer relationships across EMEA and USA. More than 70% of its revenue is generated through exports to over 100 countries. We believe that the expertise and portfolio of CUMI and RHODIUS complement each other well and the acquisition will significantly aid CUMI in global market expansion. We are delighted to be working with the RHODIUS team to fulfil our global plans.”

Sridharan Rangarajan, Director Finance and Strategy of CUMI said, “Acquisition of RHODIUS along with just concluded AWUKO Abrasives asset purchase aligns with CUMI’s strategic expansion plans. RHODIUS concluded 2021 with a Sales of Euro 62.5 million along with a healthy return profile. RHODIUS is a producer of the world’s thinnest cutting wheel with extensive innovative capabilities including more cuts per battery charge. With its highly automated production process, it sets industry benchmark.

The Indian Market for Thin Wheels is expected to grow fast with the Gati Sakthi program of the Government of India. We expect growth in the USA market with US Government committed spend on infrastructure. Similar trends are visible in other geographies. A CUMI-RHODIUS alliance will be timely to capture these opportunities. We see synergies in assured grain supply, market access in India and Russia, and making CUMI’s products available through RHODIUS’s distribution network.”

Bernd Lichter, Managing Partner at RHODIUS said “CUMI offers RHODIUS Abrasives a unique platform with important strategic advantages, especially in the areas of depth of product range, raw materials and global distribution. This will elevate RHODIUS’s growth strategy to the next level.”

Investec was the exclusive financial advisor to CUMI and CapitalMind represented RHODIUS on the transaction.

On Thursday, stocks of Carborundum Universal was trading at Rs870 apiece down by Rs8.6 or 0.98% on Sensex, at around 2:46 PM.