Buyout Investments

Tetra

Activity

Tetra was founded in Melle, Germany by Dr. Ulrich Baensch in 1951. In 1955, Tetra became the first company to sell aquarium fish food in flake form with the introduction of TetraMin, a product that has seen considerable success since then.

Warner-Lambert acquired Tetra in 1974 and in 1993 Tetra bought out Willinger Bros. Inc., a company that markets aquarium pumps, filters and plastic plants based in Oakland, New Jersey in the USA. The acquisition served to expand the equipment product range. Today, Tetra is the world’s biggest aquarium fish food company and one of the world’s largest players in home aquariums and garden ponds. Its sales presence in 90 countries and very broad product range makes Tetra the only global player in this market. In 2004, Tetra reported revenue of €187m of which 42% was in North America, 40% in Europe and 18% in Japan.

The aquarium fish food market generates annual revenue of over €1.1bn worldwide at wholesale prices. Aquarium fish are the most popular pets in the USA and the third most popular worldwide.

Context

Tetra became a division of Pfizer in 2000 when the world’s biggest pharmaceutical firm acquired Warner-Lambert. Triton, a European independent capital-investment fund, bought Tetra from Pfizer in an LBO as part of Pfizer’s strategy to refocus on its core businesses. AXA Private Equity acquired a 22% stake in Tetra from Triton in April 2003, giving it a seat on Tetra’s Advisory Committee.

Strategy

Finalise Pfizer’s separation
Improve margins and cash flows
Beef up the management teams
Expand geographical coverage and revenue growth

Divestment

In April 2005, AXA Private Equity and Triton sold their equity stake in Tetra to Rayovac Corporation of the USA for some €415m.