Murugappa Group company Carborundum Universal (CUMI) has signed a binding Share Purchase Agreement to acquire a 100 per cent stake in Silicon Carbide Products, Inc USA (SCP) from its current equity shareholders. The deal values SCP at an enterprise value of $6.66 million (about ₹56 crore).
CUMI plans to establish a wholly-owned subsidiary in the US, which will serve as the Special Purpose Vehicle (SPV) for this acquisition. The transaction is anticipated to be finalised by the end of October 2024, according to a statement.
“SCP ended 2023 with sales of $4.2 million and a strong profit and return profile. CUMI plans to utilise SCP’s advanced nitriding furnace design and tooling capabilities to address critical thermal applications in the Indian market, particularly in the power, steel and mining sectors,” said Sridharan Rangarajan, Managing Director of CUMI.
Customer network
Also, CUMI will leverage SCP’s extensive customer network in the Americas to promote its products in industries such as glass, super alloys, petrochemicals, non-ferrous metals, and heat treatment. “We also see potential for synergies through the supply of CUMI’s raw materials to SCP and collaborative development of new products and technologies. We believe this acquisition will significantly enhance CUMI’s global market presence,” he added.
Located in Horseheads, NY, SCP specialises in the production of high-quality Nitride Bonded Silicon Carbide (NBSiC) products, which cater to various industries including power generation, mining, material handling/processing, non-ferrous molten metal transfer, and petrochemical refineries.
“Joining forces with CUMI will enable SCP to expand its business through a broader product portfolio and increased market access. The combination of CUMI’s and SCP’s strengths will foster the development of new products and enhance market reach,” said Joshua Dahlman, President of SCP, and Rick Cleveland, Vice-President of SCP.