CUMI GmbH of Germany, a step-down subsidiary of Murugappa group company Carborundum Universal (CUMI) has entered into an asset purchase agreement with the insolvency administrator of German-based AWUKO Abrasives for acquiring the main assets of the latter. The estimated purchase price is to the tune of euro 6.01 million excluding the compensation cost to be agreed with the works council and other costs.
Insolvency proceedings in AWUKO had commenced recently and CUMI has been selected as the successful bidder in a competitive bidding process for the assets of AWUKO which included land & building, plant & machinery, fixed assets, leased assets, brands & trademarks, patents, technical know-how and other intangible assets but excludes cash and receivables.
The asset purchase deal will be subject to the completion of negotiations with the works council in connection with the right-sizing of employees as well as agreements with the creditors of AWUKO.
AWUKO is a 120-year-old leading brand in coated abrasives business. It is a market leader in leather and wood applications with a strong presence in metal and lacquer applications.
N Ananthaseshan, MD of CUMI said: “Acquiring the assets of AWUKO fits in well with CUMI’s expansion plans in Europe. CUMI will gain access to the coated abrasives capacity of 10 million square meters, global distribution base and an experienced process & application engineering team. Significant cross-learning is possible as CUMI also operates two coated abrasive makers in India. Further, CUMI will be able to provide critical raw materials to AWUKO from its operations in India and Russia.”
CUMI is a leading material sciences engineering solutions provider. Its consolidated revenue was at Rs 2,631 crore and PAT stood at Rs 284 crore for the financial year FY21. The company has over 5,000 employees worldwide and has a wide geographical presence spanning five continents and exports products to over 43 countries.
Sridharan Rangarajan, director of finance and strategy of CUMI, said: “The acquisition is in line with CUMI’s aggressive inorganic growth plans. With our expertise and experience in turning around the performance of stressed assets, we intend to enhance our international offerings in coated Abrasive products. CUMI will benefit with the access to varied technology and leveraging opportunity for each other’s brands.”