Activist Spectrum Entrepreneurial has a stake in Landis+Gyr, and it may be poised to build value

Business: Landis+Gyr Group is a Switzerland-based company primarily engaged in the electrical components and equipment manufacturing business. It specializes in metering solutions for electricity, gas, heat/cold and water for energy measurement solutions for utilities. Landis+Gyr product portfolio consists of advanced metering and intelligent energy management products, such as electricity meters, heating and cooling meters, grid management solutions and personal energy management solutions. In addition, the company offers various software services, managed services, cloud services, smart grid services, systems integration, training, as well as consulting and support services.

Stock Market Value: roughly 1.49B Swiss francs (CHF 51.60 per share)

Ownership: 5.01%

Average Cost: n/a

Activist Commentary: Spectrum Entrepreneurial Ownership (“SEO”) manages a concentrated portfolio of large minority investments, typically six to eight positions, in listed European companies with a focus on the DACH region (Germany, Austria and Switzerland). As a long-term and engaged anchor shareholder, SEO strives to unleash its portfolio companies’ full value potential. The firm targets small and mid-cap companies with multiple catalysts for value creation and prioritizes amicable engagement, typically sitting on the board of most of the companies where they have engagements. The fund’s stable capital base stems from family offices, endowments, pension funds, and other long-term institutional investors. SEO was co-founded in 2022 by Fabian Rauch and Dr. Ilias Läber. The two principals have a combined four decades of board experience in listed companies and each previously worked at Cevian Capital for roughly a decade.

Landis+Gyr is a Switzerland-based leading global provider of integrated energy management solutions, specializing in advanced metering infrastructure and smart grid technologies. Utilities and energy providers utilize Landis’ portfolio of smart metering tech, sensors, software and services to modernize and improve the efficiency of their infrastructure. While Landis is a very old company, founded in 1896, it was privately owned and invested in by a series of strategic and financial investors for much of its history. In 2011, Toshiba acquired a 60% stake in the company for U.S. $2.3 billion, but eventually opted to IPO the Swiss unit six years later. It began trading on the SIX Swiss Exchange on July 21, 2017, at 78 Swiss francs (CHF) per share, implying a market cap of CHF 2.3 billion.

Today, Landis is trading well below its IPO price, down over 35%. It is also significantly undervalued, trading around 7.5-times enterprise value/EBITDA, compared to its Nasdaq-listed pure-play peer Itron (roughly 15-times) with which it functionally has a duopoly in the United States, each controlling 35% to 40% of the market. In July 2024, SEO acquired a 5% interest in Landis from Kirkbi, becoming the second largest shareholder. Shortly after, Landis requisitioned an extraordinary general meeting to elect to the board Fabian Rauch, co-founder and managing partner of SEO, in August 2024. Two months later, on Oct. 30, 2024, the company announced a strategic review of its business portfolio which includes the following key elements: (i) increasing focus on its Americas business; (ii) reviewing value creation opportunities for its Europe, Middle East and Africa (EMEA) business; and (iii) evaluating a potential change in listing location to the United States. However, several things have sent the stock price down since then, including Landis reducing its FY24 revenue guidance by 8% and the announcement that it will exit its electric vehicle charging business in EMEA, resulting in expected impairment charges of $35 million to 45 million. Regarding the reduction of guidance, despite Landis continually messaging that post-Covid growth was unsustainable due to pent-up demand, the warnings fell on deaf ears. Shares fell nearly 22% on Feb. 11, 2025, the date of the announcement.

Focusing on the Americas makes a lot of sense. Landis generated $1.963 billion of revenue from three geographic segments: Americas (58%), EMEA (34%), and Asia-Pacific (8%). Despite EMEA contributing a third of revenue, it delivered just 8% of adjusted earnings before interest, taxes, depreciation and amortization, less EBITDA than its significantly smaller Asia-Pacific unit. Exploring additional possibilities for growth in the Americas and winding down its EMEA business through either a sale or spinoff of this business could be highly accretive to shareholder value. A change in listing location, likely to a U.S. exchange, would also make sense considering that this Swiss company is generating most of its profits in the region. This is a strategy which Cevian pushed for at both CRH and Pearson, and it has been a popular activist catalyst in Europe in recent years.

Landis is a story of a failed equity with somewhat of an insular board. Welcoming Fabian Rauch was the first strong signal that the board wanted change. Announcing a value-creating plan shortly thereafter was the second signal. The third happened in November 2024, when the company replaced CEO Werner Lieberherr with Peter Mainz. Finally, the fourth signal happened in January 2025 when the company announced that its chairman Andreas Umbach will not stand for re-election and will be replaced by Audrey Zibelman.

Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments.