Carborundum Universal Ltd to acquire 100% stake in Silicon Carbide Products, Inc

Carborundum Universal Limited (CUMI) has entered into a binding Share Purchase Agreement to acquire a 100% stake from existing equity shareholders of Silicon Carbide Products, Inc. USA (SCP) on 16 September 2024 at an Enterprise Value of USD 6.66 million (INR 56 Cr indicative). CUMI will incorporate a wholly owned subsidiary in USA, which will act as the Special purpose vehicle (SPV) for this acquisition. The transaction is expected to be completed by the end of October 2024.

SCP, located in Horseheads, NY, USA, specializes in producing high-quality Nitride Bonded Silicon Carbide (NBSiC) products. NBSiC ceramics have superior wear and thermal shock resistance. SCP has over three decades of experience in providing customized solutions to customers in the USA and globally. Their product range serves industries such as power generation, mining, material handling/processing, non-ferrous molten metal transfer, and petrochemical refineries. Recognized for their technically superior firing and forming processes, SCP is a trusted supplier to leading industry players in these sectors.

Talking about the acquisition, Mr. Sridharan Rangarajan, Managing Director of 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. 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 of SCP, and Rick Cleveland, Vice President of SCP, shared, "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."

Shares of Carborundum Universal Limited was last trading in BSE at Rs. 1471.45 as compared to the previous close of Rs. 1503.30. The total number of shares traded during the day was 4551 in over 789 trades.

The stock hit an intraday high of Rs. 1509.00 and intraday low of 1468.05. The net turnover during the day was Rs. 6757403.00.

Source : Equity Bulls

Keywords

CarborundumUniversal INE120A01034 SPA Acquisition SiliconCarbideProductsInc USA