Interview with Dr. Rolf Lanz, Managing Partner of CGS Management AG

SIX's first DE SPAC transaction brings a “hidden champion” to the stock exchange


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 an exclusive financial and M&A advisor, IFBC supported CGS Management AG (CGS) and the other owners of the R&S Group in the entire transaction process as well as contract and purchase price negotiations and contributed their sound 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need for electrification and megatrends such as decarbonization, decentralized power generation and modernization of outdated grid infrastructure.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.

Why do we call the R&S Group a “hidden champion”?

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 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.

What is CGS's recipe for success and why was this project important to you?

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. Then we are guided by shared values. As a result, in a transaction, management and the CGS team are at their best. 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.

What are the special features of a DE SPAC transaction?

To start, we need the right partner, which we had 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 also factors that we were unable to influence. We are convinced that the R&S Group is an attractive addition to SIX.

Were there also difficult moments in the transaction process?

Yes, there were, as in all complex transactions, but with an experienced team, you can always find a way. During the entire process, the burden on management was very high due to the specific requirements for the company in this transaction. An experienced team consisting of employees from us, the company, our lawyers and IFBC was decisive in providing targeted and trusting support here. 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 takeover.

What challenges do you see for the R&S Group in the future?

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. I regard successfully managing a global workforce of over 600 employees and achieving the desired growth sustainably and profitably as 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.

How was the collaboration with IFBC?

At IFBC, I particularly appreciated the in-depth knowledge of M&A and equity capital markets combined with a high level of security in deal execution and the pragmatic and efficient approach. At all times, the project was well managed and our team received the right support. IFBC brought in a fresh, objective and solution-oriented view from outside and we quickly became a well-coordinated team. All stakeholders involved were very satisfied with the results.

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. Thanks to his many years of experience in industry, he is practiced in defining the corresponding strategies in portfolio companies and knows the processes in industrial, medium-sized companies - the prerequisite for successfully implementing strategies. Rolf Lanz holds a Master of Business Administration from the University of Zurich and earned his doctorate with his dissertation “Controlling in SMEs”, also from the University of Zurich.

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