Germany’s Cumi Abrasives GmbH, a step-down, wholly-owned subsidiary of Carborundum Universal (Cumi) of Murugappa Group, has entered into a binding share-purchase agreement to buy 100% stake in Rhodius Abrasives, Germany, at an enterprise value of €55 million (around `464 crore). The transaction is expected to be completed by the end of March 2022.

N Ananthaseshan, MD of Cumi, said, “Rhodius has over seven decades of experience manufacturing high-performance grinding and cutting consumables for machining of metal and stones. The company 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 the US. 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.”

Rhodius concluded 2021 with a sales of €62.5 million along with a healthy return profile. It is a producer of 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 Shakti programme of the Government of India.

Cumi expects growth in the US market, with the US government committing spend on infrastructure, and it sees similar trends in other geographies.
Sridharan Rangarajan, director finance and strategy of Cumi, said: “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’ distribution network.”

Rhodius Abrasives is present in Germany and operates in the Netherlands, Brazil, South Korea and France through its subsidiaries, and in Spain, the Czech Republic, Poland and Slovakia through branches.

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’ growth strategy to the next level.”

Investec was the exclusive financial advisor to Cumi and CapitalMind represented Rhodius on the transaction.