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Market access and product expansion through strategic acquisition
With the 100% acquisition of Kyte Powertech Limited, R&S Group Holding AG has taken a significant strategic step: With this acquisition, the group expands its product portfolio and gains access to new markets such as Ireland, the UK and Western Europe. Kyte Powertech, a leading manufacturer of distribution transformers, was acquired for an enterprise value of EUR 250 million.
The transaction was financed by a CHF 233 million bridge loan. IFBC supported R&S Group as financial advisor throughout the entire transaction process and played a key role in designing the financing structure.
Markus Lässer, CEO of R&S Group, will tell us more about the acquisition and the company's future plans.
R&S Group views M&A as strategically important and regularly evaluates acquisitions. The focus is on companies that are market leaders in their field. In this sense, Kyte Powertech, with its product range and geographic presence, is an excellent addition to R&S Group. The strategic fit of this transaction is also very high thanks to the potential for cross-selling.
Kyte Powertech enables the R&S Group to expand into Ireland, the United Kingdom, the Netherlands, Belgium and France. With Kyte Powertech's transformers, we are expanding our product range: While our plants cover the range of approximately 3-6 megavolt-amperes (MVA), Kyte Powertech can manufacture transformers of 10 megavolt-amperes (MVA) and more. This is a valuable expansion of market coverage for both sides and attractive for our customers.
We had a very good experience with IFBC as part of our initial public offering (de-SPAC), which is why we chose IFBC again. On the one hand, we appreciate IFBC's expertise in complex valuations and their critical scrutiny of the assumptions of a due diligence. On the other hand, we receive good assessments of the financial appropriateness of a transaction from an external perspective. With IFBC, we had a very good sparring partner at our side with whom we could develop solutions in dialog.
Like the “strategic fit”, the “cultural fit” is also of central importance for the integration of a company. Kyte Powertech's management, under the leadership of Stephanie Leonard, corresponds to the values of the R&S Group, which is an excellent basis for future cooperation. The reinvestment of the existing management in the R&S Group is an expression of trust and a confirmation that we believe in the business plans and a successful future together.
The past few years have shown that energy is not available in unlimited quantities and at almost no cost. At the same time as the energy transition, demand for electricity is increasing due to digitalization and electric mobility. In order to keep pace with the new conditions and the increasing demand, grid operators urgently need to modernize their infrastructure. Certain renewable energies, such as wind, are dependent on their location – wind turbines are ideally located on a mountain. This is where our distribution transformers come into play.
Distribution transformers will be increasingly able to handle electricity intelligently – this includes storing electricity, efficient and controllable throughput and distribution as needed. The R&S Group already has a sophisticated product range and is investing specifically in innovation projects.
Markus Lässer has many years of international experience as CEO and in senior positions in the areas of general management, sales, marketing and IT at companies such as IBM, Microsoft, T-Systems, Dätwyler and Oerlikon. As CEO of the R&S Group, he focuses on expanding the markets for electrical infrastructure to provide the most reliable and efficient products and services.
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