Envirotainer

Cinven funds acquired Envirotainer in September 2018, having tracked the company since 2012 and after submitting an unsolicited offer to buy it in 2016. The company’s biggest attractions included its market-leading position, extensive network, best-in-class reliability, strong customer relationships and regulatory expertise – essential in the highly regulated healthcare industry. We also knew the sector well and could see the trend towards biological pharmaceuticals, and that the need for temperature-controlled environments would underpin – and accelerate – Envirotainer’s growth.

Throughout Cinven’s investment, we drew on our local regional and sector expertise, as well as our experience of developing companies, to help Envirotainer’s executive team develop a growth strategy that took account of operations, research and development (R&D) and products. We also helped professionalise the company.

Today, six years on, Cinven still owns a 10% stake in the business, having largely realised the company in 2022.

“We don’t often retain stakes when we agree a successful realisation, preferring to return capital to our investors, but it was the right time to realise the investment. The enterprise value of the business had more than doubled from €1.3 billion to €2.8 billion and revenues had increased by a third. Nevertheless, we saw the prospect of significant further value creation and wanted to continue the journey as a minority shareholder with a seat on the board,” says Tom Thomasson, Principal at Cinven.

Preparing for growth

Envirotainer had grown fast and was clearly a successful company, but in 2018 it was clear steps needed to be taken for it to fulfil its potential. We worked with the board to make sure customers got the attention they needed. This included splitting into two a role that had previously seen one person responsible for R&D, customer service and operations. “All of a sudden, the role could ensure customers were served better, more efficiently, at less cost. That really had important growth and profitability implications,” says Thomasson.

Cinven supported Envirotainer’s investment in infrastructure, including a new pharma hub in Asia Pacific, a region set for strong growth but underserved, and new service stations in India, China and Korea. At the same time, the company gained new digital tools such as a customer platform, Releye, that takes bookings and tracks shipments in real time for Envirotainer’s next-generation shipping containers – making operations more efficient and reducing cargo losses to zero.

When Cinven invests in a company, it’s never just about providing funds to invest for growth. We also bring expertise to help the board develop the right medium to long-term strategy. For Envirotainer, this included increasing research and development investment in new products, ensuring that what was measured and incentivised helped pull the right growth levers, and making sure its environmental, social and governance (ESG) approach was best-in-class.

Rapid growth had left Envirotainer short of products. In 2018, its containers were old, in short supply and their batteries were beginning to break down. This made it harder to guarantee availability on specific dates at specific locations, causing problems for customers. We recognised that it needed more, high-quality, redesigned containers.

Designing and certifying new containers takes up to three years, so we started by ensuring the fleet the business had was employed optimally for customers and for profitability.

Together with management we developed three operational key performance indicators: (i) reliability, which is all about temperature control; (ii) availability, which was about having the right container in the right place at the right time; and (iii) volume, whereby shipments were prioritised according to their contribution to gross profit. This focussed the company on driving decisions, such as the move to predictive container maintenance, which fed into these KPIs.

At the same time, the company tripled R&D spend and developed Releye, its next-generation container system. The Releye system has real-time monitoring and can go 170 hours without recharging, longer than any other system on the market.

Another important strategic decision concerned data – how best to use it to drive growth. By looking at the flow of medicines, how it’s changing, where they are being produced, and where used, the business could foresee customers’ needs and adapt the product and services accordingly – to the benefit of everyone.

Crucially, we also turned our attention to Envirotainer’s ESG record. As an airfreight user, the company needed a crystal-clear view of its carbon impact and an effective plan to minimise it. Working with Cinven’s head of ESG, Allegra Day, Envirotainer developed a sustainability framework, mapped its carbon footprint and reached CO₂neutrality before our realisation. We also worked with the business to increase female representation on the board from zero to 40%.

Under Cinven’s ownership, sales rose from SEK1.3 billion in 2017 to SEK1.9 billion in 2021, the year before our realisation. In 2023, the business hit SEK2.6 billion.

The fleet increased from some 5,500 containers to nearly 8,000 today. The company won new customers and increased volumes thanks to better service and improved reliability, with 99% of orders completed without issue and complaints halved.

The crucial role Envirotainer played in distributing Covid-19 vaccines to help contain the pandemic, and the career progression opportunities that growth has opened up, fed quickly into high work satisfaction among Envirotainer’s staff. In 2021, the company’s workplace satisfaction score was 84%, compared with Sweden’s industry average of 62%. This, in turn, helped with recruitment and talent retention, which supports further growth, helping Envirotainer fulfil its mission – providing global access to biopharmaceuticals.