How did Technoflex develop?
Olivier Chesnoy: The group's initial plastic injection moulding business dates back to 1972. The shift towards flexible packaging for the healthcare industry began around 30 years ago, with the creation of Technoflex by its two founders with the aim of establishing a position directly in the infusion bags market. This was a new, fast-growing market, with the replacement of old means of infusion using fragile glass bottles or rigid, opaque plastic bottles. The company saw rapid expansion, positioning itself in mass markets (single bags for infusion solutions) across Europe.
An initial model that showed its limitations in the 2000s?
O.C.: Yes. Positioned primarily in this high-volume market, the company had to cope with the emergence of low-cost competitors developing at a very fast rate against the backdrop of healthcare spending cuts implemented by the majority of European governments. In order to remain competitive, it need to relocate production, which is not at all in keeping with the values of the company and its strong local ties.
In 2011, you were put in charge of repositioning the company?
O.C.: In a delicate situation, the long-standing shareholders decided to call on an external manager to lead the company's recovery and redefine its business strategy. With the management team, I quickly decided to strengthen the company's position in more complex and innovative products: ready-to-use bags for medicines. This approach was made possible by our sales teams' knowledge of the healthcare markets, as well as the existence of a solid in-house R&D department - a significant advantage for Technoflex once it had turned its focus to the right priorities. In concrete, it is about offering our pharma industry clients bespoke bags compatible with the prefilled treatments they contain. We are therefore able to capitalise on our knowledge of interactions between plastic and drug contents, as well as our regulatory expertise for putting together registration applications. This therefore allows gives pharma manufacturers peace of mind to focus on the impact of drug molecules on patients. Today, ready-to-use bags for medicines account for over half of our business.
You also went from a pan-European presence to a worldwide presence?
O.C.: Absolutely. We have grown considerably, particularly in the United States, which is both the largest healthcare market in terms of value and one of the demanding markets for new applications. International activities now account for 80% of our revenues, of which 50% is generated in this United States.
What does this more upscale focus imply in terms of organisation and investment?
O.C.: We have above all developed our competitive advantages. We have optimised our production methods in order to further improve our quality standards, which are already recognised by our clients. We have also reinforced our dedicated R&D team, which was already what made us stand out. We are therefore able to offer tailor-made solutions for our clients. This shift towards innovation also allows us to think about diversifying our range, with new products targeted at the healthcare industry in the wider sense, in particular biotechs. Lastly, we have also built up our regulatory and quality assurance team, which helps our clients with registering their drugs with health agencies and tracking their applications with the authorities.
What role does Crédit Mutuel Equity play in this transformation?
O.C.: The company's repositioning required heavy investment that the founding families were no longer able to provide. A change in the shareholding structure, allowing them to withdraw while also providing additional investment capacity, became essential. I therefore initiated a buyout plan, involving the key managers and with the support of a core investor. I turned to Crédit Mutuel Equity (formerly CM-CIC Innovation), which was then a minority shareholder of Technoflex and knew the company very well and supported our strategy. In addition to its local footing, which is very important for us, it was also one of the few investors prepared to make a long-term commitment. This is fundamental in a sector where bringing a new product to market can take five to 10 years.
What the partner says
Olivier Chesnoy, Chief Executive Officer of Technoflex since 2011, is continuing with the roll-out of his strategy of stepping up the pace of international activities and offering ever-more innovative solutions, targeting cell therapy and drugs offering high therapeutic added value. In this regard, we firmly believe in the relevance of strategic positioning of Technoflex, which operates in a fast-growing market and faces competition from major international groups.
A long-standing shareholder in this impressive medium-sized business since 2005 alongside the founding families, Crédit Mutuel Equity wanted to work with the company on a long-term basis. Working closely with Olivier Chesnoy and his team, we started to think about a new shareholding structure and organised a management buyout deal, thereby becoming the new core shareholder alongside them.
A specific team was set up in-house, combining buyout capital expertise and knowledge of the company and its values obtained from our long-standing close relationship. This cross-departmental approach confirms Crédit Mutuel Equity's ability to offer ad hoc solutions to the often complex issues that arise in buyouts of family businesses.
Technoflex now has major resources with which to increase its production capacity, continue its international development and meet new demand for high-value-added plastic packaging solutions.
€35m of revenue
80% of revenue generated outside France
277 employees