Carborundum Universal To Acquire US-Based Silicon Carbide Products For Rs 56 crore

Carborundum Universal Ltd. on Monday announced that it has inked a pact with the US-based Silicon Carbide Products Inc. to acquire 100% stake in the company for $6.7 million, or approximately Rs 56 crore.

Silicon Carbide Products, located in Horseheads in New York, specialises in producing high-quality nitride-bonded silicon carbide products, according to the company's press release.

Carborundum Universal, which is involved in the manufacturing of ceramics, adhesives and polymers, expects to expand its global footprint by acquiring the company.

The transaction is expected to be completed by Oct. 31, an exchange filing said.

To complete the acquisition, Carborundum Universal will be setting up a special purpose vehicle in the US, which will be its wholly-owned subsidiary that will acquire the stake in Silicon Carbide Products.

The acquisition will allow Carborundum Universal to gain from Silicon Carbide Products' "superior nitriding furnace design, patterning and tooling capabilities to address the Indian market for critical thermal applications, majorly in the power, steel and mining sectors," the filing said.

Silicon Carbide Products concluded 2023 with sales of $4.2 million, said Sridharan Rangarajan, managing director of Carborundum Universal. The company will tap into its extensive customer network in the US to "market its products to industries such as glass, super alloys, petrochemicals, non-ferrous and heat treatment,"  he added.

Silicon Carbide Products' President Joshua Dahlman said the acquisition allows the company to grow its business with "an expanded product portfolio and additional market access."

The disclosure related to the acquisition was made by Carborundum Universal after market hours. The company's shares declined 1.97% to Rs 1,473.3 on the NSE, as compared to a 0.11% gain in the benchmark Nifty 50.