CUMI acquires RHODIUS Abrasives

Investec advised CUMI on its acquisition of RHODIUS Abrasives for USD 62 mn

Investec acted as the exclusive financial adviser to CUMI on its 100% acquisition of RHODIUS Abrasives.

Investec's role:

Investec was pivotal in identification of the target asset and advisory on the buy side for CUMI. We had pre-engaged with CUMI to introduce the asset and ensured early participation in the auction process demonstrating clear synergies.
Investec actively co-ordinated the due diligence process, assessed high level risks in the transaction and advised CUMI on offering a competitive valuation for the asset.
The deal involved dealing with various complexities, including the carve-out of the abrasive tools division of RHODIUS and its subsequent sale, negotiation on warranties, hold-backs, indemnities, and documentation and Investec provided guidance to CUMI at each step and handheld the company achieve a successful outcome.

About CUMI Abrasives:

CUMI Abrasives Germany, a wholly-owned subsidiary of Carborundum Universal Limited, a Murugappa family holding company, acquired RHODIUS with a strategic interest in enhancing their technology and geographic access.

About RHODIUS Abrasives:

RHODIUS Abrasives, part of RHODIUS Group, have been manufacturing high-performance tools for the machining of metal and stone in the Eifel region of Germany. These tools are used in over 100 countries worldwide. The combination of CUMI and RHODIUS creates a vertically integrated global player in the field of grinding tools, from the raw material to the end user. The acquisition will significantly aid CUMI and RHODIUS in global market expansion by strengthening CUMI’s presence in the European market and open market for RHODIUS’s products in India and Russia

Client feedback:

“RHODIUS has over seven decades of experience manufacturing high-performance grinding and cutting consumables for machining of metal and stones. RHODIUS 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 USA. 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. We are delighted to be working with the RHODIUS team to fulfil our global plans.”
- N. Ananthaseshan, Managing Director, CUMI

“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’s growth strategy to the next level.”
- Bernd Lichter, Managing Partner, RHODIUS

“Acquisition of RHODIUS along with just concluded AWUKO Abrasives asset purchase aligns with CUMI’s strategic expansion plans. RHODIUS concluded 2021 with a Sales of Euro 62.5 million along with a healthy return profile. RHODIUS is a producer of the world’s thinnest cutting wheel with extensive innovative capabilities including more cuts per battery charge. With its highly automated production process, it sets industry benchmark. The Indian Market for Thin Wheels is expected to grow fast with the Gati Sakthi program of the Government of India. We expect growth in the USA market with US Government committed spend on infrastructure. Similar trends are visible in other geographies. 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’s distribution network.”
- Sridharan Rangarajan, Director Finance and Strategy, CUMI