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SIX's first DE SPAC transaction brings a “hidden champion” to the stock exchange
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VT5 Acquisition Company AG (VT5), the Swiss Special Purpose Acquisition Company (SPAC) listed on SIX, signed an agreement in October 2023 to acquire R&S International Holding AG (R&S Group) for CHF 274 million as part of a business combination to take it public on SIX. Following the approval of the VT5 shareholders, the first trading day took place on 13 December 2023 under the new symbol RSGN and the ISIN number CH1107979838. The R&S Group is a “hidden champion” and is one of the leading suppliers of electrical infrastructure products such as transformers in key markets in Europe and the Middle East.
As the exclusive financial and M&A advisor, IFBC supported CGS Management AG (CGS) and the other owners of R&S Group throughout the transaction process, including contract negotiations and price discussions, leveraging their extensive corporate finance expertise.
CGS specializes in forming and developing medium-sized companies into international groups. The R&S Group's growth potential is based on the global need for electrification and megatrends such as decarbonization, decentralized power generation and modernization of outdated grid infrastructure. Dr. Rolf Lanz, Managing Partner of CGS and Board of Directors of the R&S Group, gives an insight into his entrepreneurial experience and the special features of the transaction in the following interview.
The R&S Group is benefiting from the expected increase in power generation capacity and the increased requirements for the reliability and resilience of power distribution. Our engineers are working intensively to further increase the performance of transformers and to reduce losses during power conversion. It is also important to create depth of value creation in this business. With six production sites in Europe and the Middle East as well as a broad, worldwide partner network, the R&S Group is able to offer to its customers tailor-made solutions with short lead times. That is why we are an industrial market leader. The R&S Group is “hidden” because it is not in the public spotlight in this market.
CGS invests where we know our way around and have management experience. The basis is always a clear and jointly developed buy & build strategy for the respective company. We are also guided by shared values. This results in the management and the CGS team performing at their best together during a transaction. This IPO only came about because all participants delivered top performance. CGS used Rauscher Stöcklin AG as a platform investment and successfully developed the multinational R&S Group from this. The Bell-Ringing Ceremony was then the highlight in the company's history so far.
To begin with, it requires the right partner, whom we found in VT5. As a result, important decisions and the establishment of requirements for the IPO progressed quickly. On a short timeline, this is an advantage. At the same time, together with VT5, we broke new ground with this transaction (first de-SPAC in Switzerland). This also created uncertainties that we had to consider with foresight. In addition, there was the coordination of an extremely large number of parties and other factors that we were unable to influence. We are convinced that the R&S Group is an attractive addition to SIX.
Yes, there were, as in all complex transactions, but with an experienced team, you will always find a way. Throughout the process, the management was under significant pressure due to the specific demands placed on the company in this transaction. A well-coordinated team consisting of our employees, the company, our attorneys, and IFBC was crucial in providing targeted and trustworthy support throughout. At the beginning, we also had to invest a lot of time to make the R&S Group's potential visible and, above all, resilient. The company's management and IFBC were able to optimally assist us with due diligence support. On this basis, the shareholders of VT5 then supported this transaction and approved the acquisition.
Electrical energy powers our modern societies. Renewable energy systems are often located far from the centers, which is why more transformers are required for transmission. The R&S Group is a leading provider of electrical infrastructure products and thus, makes an important contribution to the supply of electricity around the world. This requires concentrated expertise and ambitious teams. Successfully leading a global workforce of over 600 employees and achieving sustainable and profitable growth I consider to be the biggest challenge for the R&S Group. However, this management task is in good hands with our Executive Committee. The results for 2023 were excellent and represent a good starting position.
I particularly valued IFBC’s profound expertise in M&A and Equity Capital Markets, coupled with a strong commitment to deal execution and a pragmatic, efficient approach. The project was well-managed at every stage, and our team received targeted support when needed. IFBC brought a fresh, objective, solution-oriented perspective, and quickly we became a cohesive team All stakeholders involved were highly satisfied with the outcome.
Dr. Rolf Lanz, Managing Partner at CGS since 2000, was previously CEO and member of the Board of Directors of an international trading company. He has extensive experience as CEO and CFO in various industries, in particular construction suppliers, electronics and machinery. Through his comprehensive industrial experience, he is adept at defining appropriate strategies within portfolio companies and understands the processes in industrial, mid-sized companies - essential for a successful strategy implementation. Rolf Lanz holds a Master of Business Administration from the University of Zurich and earned his doctoral degree with his dissertation titled 'Controlling in SMEs,' also at the University of Zurich.
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