VT5 updates on expected positive business performance of R&S Group

This announcement or the information contained therein is not being issued and may not be distributed in the United States of America, Canada, Australia or Japan or any other jurisdiction in which the distribution or release would be unlawful or require registration or any other measure and does not constitute an offer of securities for sale in such countries.

Ad hoc announcement pursuant to Art. 53 LR
5 December 2023

VT5 updates on expected positive business performance of R&S Group 

• Revised FY 2023 guidance of R&S Group highlighted by expected revenues of above CHF 200 million and an EBIT margin of approx. 18% (excluding to be fully divested plant in the Czech Republic / SERW); mid-term guidance remains unchanged
• Order backlog of approx. CHF 200 million at the end of November 2023 with a book-to-bill-ratio of 1.2x
• Balance sheet further strengthened with a net cash position of CHF 25.6 million at the end of November 2023 (CHF 14.2 million at the end of September 2023)
• Strong support indicated from VT5 shareholders and new investors
• Board of Directors of VT5 considers entering into new credit agreements of up to CHF 40 million to increase flexibility for the business combination of VT5 with R&S Group and to reduce dilution of shareholders

The Board of Directors of the Swiss listed SPAC VT5 Acquisition Company AG (“VT5”) has been informed by R&S Group that the business in Q4 2023 is developing better than anticipated and that full-year results in 2023 are expected to exceed the guidance communicated at the time of the prospectus publication. R&S Group now expects total revenues for 2023 above CHF 200 million (prior CHF 195-205 million) and an increased EBIT margin of approximately 18% (up from 15%) excluding the plant in the Czech Republic / SERW which will be fully divested by year-end 2023. The order backlog continued to rise and reached approx. CHF 200 million at the end of November 2023, supporting R&S Group’s communicated growth and margin targets for 2024 and 2025 (based on the new FY 2023 guidance) as the business continues to expand. The net cash position rose to CHF 25.6 million (CHF 28.0 million excluding SERW) at the end of November 2023 (up from CHF 14.2 million at the end of September 2023) and provides a strong platform for future growth. The free cash flow margin is expected to rise to a mid to high single-digit as a percentage of net sales.

VT5 is finalizing new credit agreements of up to CHF 40 million with its lead banks to increase flexibility for the business combination of VT5 with R&S Group. This would allow VT5 to finance part of the cash purchase for the R&S Group in the event part of the redeemed shares cannot be replaced in the share offering. As a result, VT5 could build-up a treasury shares position, which would reduce dilution per share at the same time.

The Board of Directors of VT5 has received substantial indications of support from existing and new investors after the announcement of the proposed business combination with R&S Group. The bookbuilding of the public offering is expected to take place on 7 December and 8 December, after the end of the repurchase offer period on 6 December 2023. The listing at SIX Swiss Exchange under R&S Group, ticker symbol RSGN, is planned for 13 December 2023 with subsequent inclusion in the SPI indices SPI/SPIEX/SXSLI on 14 December 2023.

Heinz Kundert, Chairman of VT5 commented: “I am very excited about the progress achieved at R&S Group. The strong business performance leading to an even stronger balance sheet and the support indicated by existing and new shareholders to participate in the public offering are all favorable developments in the proposed business combination with R&S Group. I am looking forward to bringing the hidden champion R&S Group to SIX Swiss Exchange.”
 

Contact
VT5 Acquisition Company AG
Communications & Investor Relations
Doris Rudischhauser
Phone: +41 79 410 81 88
Email: doris.rudischhauser@vt5.ch
 

About VT5
VT5 is a special purpose acquisition company (SPAC), a vehicle to directly or indirectly acquire one or (if at the same time) more operating companies or businesses in order to take them public and provide dedicated support. VT5 provides a target company with the industry and technical experience of a seasoned team to allow a fast and smooth way to become a public company in Switzerland. VT5 seeks to unlock this investment opportunity for investors by entering into a business combination with a technology and innovation leader backed by scientific research within 24 months of listing. Geographically, VT5 is looking to acquire a business in Central and Northern Europe with a focus on the DACH region and in particular on Switzerland.

The Class A Shares and redeemable Warrants are listed on SIX Swiss Exchange under the symbols of VT5 and VT5W, respectively.

More information about VT5 can be found at www.vt5.ch.
 

About R&S Group
R&S International Holding AG (“R&S Group” or the “Company”) is headquartered in Sissach/BL, Switzerland. R&S Group has six manufacturing facilities in Switzerland, Italy, Poland and the Middle East, serving its domestic as well as various European export markets with small and medium power and distribution transformers and other components in the utility, infrastructure and industrial sectors. R&S Group’s current owner, a private equity fund managed by CGS Management AG (“CGS”), headquartered in Pfäffikon/SZ, Switzerland, and R&S Group’s management have successfully positioned the Company to benefit from the accelerated demand for energy production and distribution, driven by the global trend for decarbonization.

More information about R&S Group can be found at www.the-rsgroup.com.

Disclaimer

The business combination and its implementation remains subject to approval by the investor shareholders of VT5, the approval by the VT5 shareholders meeting of other items necessary to implement a business combination, the conducting of a share repurchase to allow redemptions by shareholders, the successful completion of an offering and capital increase to finance any parts of the purchase not financed by the amounts in escrow or otherwise, and obtaining of all required approvals by the stock exchange.

This announcement may contain forward looking statements, estimates, opinions and projections with respect to anticipated future performance of VT5 ("forward-looking statements"). These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "aims," "believes," "estimates," "anticipates," "expects," "intends," "may," "will" or "should" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. Forward-looking statements are based on the current views, expectations and assumptions of the Board and management of VT5 and involve significant known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Forward-looking statements should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. Any forward-looking statements included herein only speak as at the date of this release. VT5 undertakes no obligation, and does not expect to publicly update, or publicly revise, any of the information, forward-looking statements or the conclusions contained herein or to reflect new events or circumstances or to correct any inaccuracies which may become apparent subsequent to the date hereof, whether as a result of new information, future events or otherwise. VT5 accepts no liability whatsoever in respect of the achievement of such forward-looking statements and assumptions.

This announcement constitutes neither an offer to sell nor a solicitation to buy securities of VT5 and it does not constitute a prospectus or a similar notice within the meaning of articles 35 et seqq. or 69 of the Swiss Financial Services Act. Copies of this announcement may not be sent to jurisdictions or distributed in or sent from or otherwise made publicly available in jurisdictions, in which this is barred or prohibited by law. Any investment decision regarding the publicly offered securities of VT5 should only be made on the basis of the prospectus, which is available free of charge upon request from VT5 (e-mail: info@vt5.ch).

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Securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States or to U.S. persons (as such term is defined in Regulation S under the Securities Act) unless the securities are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available. The issuer of the securities has not registered, and does not intend to register, any portion of the offering, if any, in the United States, and does not intend to conduct a public offering of securities in the United States. In an offering, if any, the securities may be offered and sold outside the United States in reliance on Regulation S and within the United States to "Qualified Institutional Buyers" (as defined in Rule 144A under the Securities Act ("Rule 144A")) in reliance on Rule 144A. Prospective purchasers are hereby notified that sellers of the securities may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A.

This announcement or the information contained therein is not being issued and may not be distributed in the United States of America, Canada, Australia, Japan, or any other jurisdiction in which the distribution or release would be unlawful or require registration or any other measure and does not constitute an offer of securities for sale in such countries.