In early 2021, TotalEnergies announced the acquisition of Fonroche Biogaz, a leader in the production of renewable gas in France. This company, which designs, builds, and operates anaerobic digestion units in France, had 85 employees at the time, the integration of which became a key issue for TotalEnergies’s Gas, Renewables & Power Business Line.
Here, Olivier Guerrini, Senior Vice President Biogas Business Unit, and Eric Pus, Deputy Head of Biogas Business Development at TotalEnergies (in charge of the integration program), give Wavestone a behind the scenes interview about this integration project, the management of which could serve as a benchmark for the company’s future acquisitions.
What was the context of TotalEnergies’s acquisition of Fonroche?
Olivier Guerrini: In September 2020, we created the Biogas Business Unit, whose purpose is to develop and operate biomethane production units fed by industrial and agricultural organic matter. We operate a bit like a start-up within a large group. We have some strong development challenges and the objectives of producing 1.5 TWh of biomethane by 2025 and about 5 to 6 TWh by 2030. The acquisition of Fonroche has enabled us to become France’s renewable gas leader. Even before the merger was signed, Eric and I took the lead to frame the integration work because we knew that, with this type of project, thinking ahead is the key. With limited internal resources, we gave thought to the specification, organized the call for tenders, and began to design the major work streams, in particular the change aspects. These latter were especially important to us and we anticipated them being a central challenge to the integration’s success.
How did Wavestone’s approach catch your attention?
Eric Pus: It was a question of integrating an SME, with its own culture and ways of working, into a large group – something that can lead to the failure of an integration project, if the differences aren’t taken into account. Wavestone’s proposal stood out because, from the very first communications, we felt they paid particular attention to the question of change and had some real convictions on the subject. We detected a strong human dimension, as well as passion and motivation from the firm’s teams to support us on the project.
Olivier Guerrini: We felt there was a good deal of modesty from Wavestone’s teams in the way they approached things. This was an especially important criterion for us because it demonstrated maturity and that they had a perspective on their ability to support us by being agile and responsive. We needed a player with both an overall vision and strong cultural sensitivity, who could feedback both weak and strong signals to us and enable us to adjust our activity accordingly. This advice and support dimension stood out very clearly in Wavestone’s offer.
How did the integration go after closing happened?
Eric Pus: It was important to us to build momentum quickly on integration. We organized a very successful hybrid “Day 1,” a few days after closing, to communicate immediately with employees and introduce ourselves. Delivering this day was a real feat for the Wavestone team, especially from a technical point of view. It was an event that made a definite impression, and we’re still talking about it months later!
Olivier Guerrini: The cultures of Fonroche and TotalEnergies are quite distinct, and the Fonroche employees had never gone through a merger before. Wavestone’s approach of being there to serve was greatly appreciated at Agen (Fonroche’s location). The composed character of Philippe Pestanes and his team, who listened while getting things done, was a decisive factor in everything we’ve accomplished. This coaching mindset, taking the time to explain things, was a major factor in the buy-in and attentiveness of the teams.
Did you encounter any difficulties in the onboarding process?
Eric Pus: A complicated area was the IT and equipment that TotalEnergies made available. We suffered from a shortage of electronic parts, which led to delivery delays on computers, printers, etc. And given the very secure TotalEnergies IT environment, we had to wait for the deployment of our network to connect all the equipment to it correctly. While we wanted to demonstrate the benefits of joining a large group, Fonroche’s user experience was really degraded at that point.
How do you view the accomplished transformation?
Olivier Guerrini: A lot was accomplished in seven months, we managed to transform Fonroche as a subsidiary, and it’s now well integrated into TotalEnergies. Employees buy in to the project because they have been players in this transformation and they see the benefits, even though we know that everything isn’t yet perfect. We were keen to drive synergies very early on, in particular as a result of the commercial opportunities provided by the company’s network and strength. Many things have been put in place, in this vein, at the commercial and R&D levels. We’re now able to support them in areas where there wasn’t time to do so before.
What do you think the key success factors were?
Eric Pus: First, preparation and planning ahead from signing to closing. This allowed us to scale the resources needed and, as a result, not to do anything in haste. The involvement of all the stakeholders also made the difference: the passion of the Fonroche teams for their work, the support and motivation of TotalEnergies’s business functions, and the investment made by Wavestone’s teams who showed great responsiveness, even during workload peaks.
Olivier Guerrini: I found that the Wavestone teams were clearly invested in the project. There was a desire to succeed collectively while remaining very modest about it. A desire to succeed not so they could say: “that’s thanks to us,” but to ensure that a jointly owned project moved forward. We were also very sad to see them leave, they’d become part of the family, and Fonroche felt this way too. I want to take this opportunity to recognize Philippe who was always in an even mood, attentive, calm, and in control – even in the most difficult times; the team felt the benefits of this too. Hats off to the work done!
The integration of Fonroche Biogaz undoubtedly owes its success to the involvement and responsiveness of Olivier, Éric, Fabien (President of TotalEnergies Biogaz France, ex-Fonroche) as well as to all the leaders and contributors to integration work streams. The integration program remained a priority for them right until the end, which, I’m sorry to say, is something that’s all too rare not to highlight. It’s a lesson to be learned for all organizations that integrate smaller companies into their group.
Philippe Pestanes,
Partner, Wavestone
