Target Information

On June 25, 2020, Cerea Partners, through its Cerea Capital II fund, completed a primary leveraged buyout (LBO) to acquire Axium, a family-owned group specializing in recyclable PET plastic and R-PET packaging. The company's leadership, including CEO Yves Cury, is making significant reinvestments in this operation, while Bpifrance has acquired a minority stake.

Axium, located near Saint-Etienne, designs and produces primarily plastic packaging for agri-food and consumer goods in health, hygiene, and beauty sectors. The company's product lineup includes bottles, caps, and containers, with a strong emphasis on sustainability, utilizing materials that are 100% recyclable or made from recycled materials like PET and PP.

Industry Overview in France

The packaging industry in France has been experiencing robust growth, driven by increasing consumer demand for sustainable solutions. As businesses and consumers become more environmentally conscious, the focus on recycling and the reduction of plastic waste has intensified. This trend has led many packaging companies to innovate and develop products that meet these new standards, contributing to a circular economy.

Moreover, the COVID-19 pandemic has highlighted the importance of resilience in supply chains, particularly in the packaging sector which saw a spike in demand for hygiene-related products such as hand sanitizers. Axium has successfully navigated this challenging landscape, maintaining strong sales due to its operational adaptability and commitment to sustainability.

In addition, France’s government has implemented stringent regulations aimed at reducing plastic waste and promoting recycling, which provides a fertile ground for companies like Axium that are already aligned with these environmental goals. This regulatory environment encourages innovation and could lead to increased market opportunities for packaging manufacturers that can adapt quickly.

Rationale Behind the Deal

The acquisition of Axium by Cerea Partners is strategic, as it positions the company to capitalize on the growing demand for sustainable packaging solutions. With the backing of Cerea's expertise in the sector, Axium aims to enhance its product development in response to environmental challenges.

The deal is also significant because it reinforces Axium's financial position, allowing it to invest further in research and development, thereby expanding its market offerings and technological capabilities. The partnership with Bpifrance will also provide essential financial support for growth initiatives.

Investor Information

Cerea Partners is a private equity firm focused on investments in the mid-market segment, particularly in the industrial and consumer sectors. With a proven track record and expertise in the packaging industry, Cerea aims to foster growth in its portfolio companies through strategic guidance and financial support.

Antoine Peyronnet, Managing Director at Cerea Partners, expressed confidence in Axium's historical growth trajectory and its future in producing recycled and recyclable plastic packaging, aligning with the overarching movements toward a circular economy. Cerea’s experience in the sector positions them as a valuable partner in Axium's next growth phases.

View of Dealert

The acquisition of Axium by Cerea Partners appears to be a sound investment. Cerea's involvement not only provides financial backing but also strategic direction that is critical for Axium to navigate the evolving landscape of packaging. Given the increasing regulatory pressures and consumer expectations regarding sustainability, Axium's existing initiatives in developing lighter, recyclable products align well with market demands.

Furthermore, the resilience demonstrated by Axium during the COVID-19 crisis indicates strong operational management, which bodes well for future growth. Their capability to adapt and meet heightened demand for sanitizing products underlines a robust business model that can withstand external shocks.

In conclusion, Cerea’s investment in Axium likely enhances the company’s competitive position in an increasingly tough regulatory environment focused on sustainability. The partnership will enable Axium to not only meet current market demands but also innovate future product offerings, thereby promising a positive return on investment for its stakeholders.

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