CUMI Abrasives GmbH, Germany, a step down wholly-owned subsidiary of Carborundum Universal (CUMI), on Thursday announced that it has entered into a binding share purchase agreement to buy 100% stake in Rhodius Abrasives, Germany at an enterprise value of 55 million € (about INR 464 crore).
According to a statement from the company, Investec served as its sole financial advisor, and CapitalMind represented Rhodius in the transaction, which is slated to close by the end of March 2022.
Ananthaseshan, Managing Director, CUMI, said Rhodius has over seven decades of experience manufacturing high-performance grinding and cutting consumables for machining metal and stones. It brings in a vast and innovative product lineup with various patented benefits that create unique selling opportunities. Besides, it is a strong proprietary brand with a 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,” he added.
According to Sridharan Rangarajan, Director Finance and Strategy of CUMI, the acquisition of Rhodius along with just concluded AWUKO Abrasives asset purchase aligns with its strategic expansion plans. Rhodius concluded 2021 with sales of € 62.5 million and a healthy return profile. Moreover, it produces the world’s thinnest cutting wheel with extensive innovative capabilities, including more cuts per battery charge. The Indian market for thin wheels is expected to grow fast with the Gati Sakthi programme of the government of India.
“We expect growth in the US 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,” Rangarajan added.
Bernd Lichter, Managing Partner, 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’ growth strategy to the next level.”