Carborundum Universal Limited (CUMI) entered in a share purchase agreement to acquire 100 per cent stake from existing equity stakeholders of Silicon Carbide Products, Inc. USA (SCP) at an enterprise value of USD 6.6 million (Rs 56 crore).
Acting as the special purpose vehicle (SPV) for the acquisition, a wholly owned subsidiary will be incorporated by CUMI. The transaction is expected to be completed by the end of October 2024.
With an experience of over three decades, SCP specialises in producing Nitride Bonded Silicon Carbide (NBSiC) products. Their product range serves industries such as power generation, mining, material handling/processing, non-ferrous molten metal transfer, and petrochemical refineries.
Commenting on the acquisition, Sridharan Rangarajan, Managing Director, CUMI said, "Acquisition of SCP aligns with CUMI's strategic expansion plans. SCP concluded 2023 with sales of USD 4.2 million with a healthy profit and return profile. CUMI would leverage SCP's superior nitriding furnace design, patterning and tooling capabilities to address the Indian market for critical thermal applications majorly in power, steel and mining sectors."
He further added, "CUMI would tap into SCP's extensive customer network in Americas to market its products to industries such as glass, super alloys, petrochemicals, non-ferrous and heat treatment. Additional synergies are expected out of opportunities to supply CUMI's grade of raw materials to SCP and in joint development of products and technologies. We believe that the expertise and solutions offered by CUMI and SCP complement each other well and the acquisition will aid CUMI in its global market expansion. We are delighted to be working with the SCP team to fulfill our global plans."
Joshua Dahlman, President, SCP, and Rick Cleveland, Vice President, SCP, said, "Joining CUMI strengthens SCP to grow its business with an expanded product portfolio and additional market access. Combining the strengths of CUMI and SCP will help develop newer products and bring synergies in market reach. We are thrilled to become part of CUMI."
