APacha has left Ibiza behind and, staying true to the name of his company (Universo Pacha SA), seeks to “expand” beyond the Balearic archipelago. universally. Mutual fund Trilantic Europe (through Akdeniz Sky International SA), which controls 87% of its shares, believes that the two cherries brand is strong enough to double its profitability beyond Pitiusas, where traditionally 98% of its business is concentrated. a company resource. Its aim is to soon establish a stake in the UK and the Persian Gulf, where it puts the ‘partner wanted’ sign at its headquarters at Avinguda 8 d’Agost in Ibiza, among other places.
The banner has been hanging visibly for a week, yes, from the moment El Confidencial published that Pacha had sold for 500m euros. It doesn’t take long for Universo Pacha to reject this and state that its intention is not to get rid of the brand but to “add a new partner” to the (universal) expansion process. “We are exploring the possibility of merging with a partner that will allow us to face the development of an ambitious international and national expansion project,” said a spokesperson for this nightlife company. Universo Pacha SA plans to open three new Lío branches next year: a new restaurant in London by early 2023; another summer in Mallorca next summer and in Dubai when the summer is over. He is also involved in the construction of a beach club in Marbella, which, together with businessman from Seville, Rosauro Varo (head of GAT Inversiones), will begin its operation in the summer of 2023.
The goal is to “continue to expand the brand, which is a very important asset, to greater international visibility.” So after two seasons of extreme drought, cherry trees aren’t just ripening in Ibiza, which is still fruitful this year: restore pre-pandemic profitability levels,” says the company’s spokesperson. A source from the investment group goes even further, describing the year as “outstanding.” and not on Lío’s dance floors, but in his hotels.
“Potential investors”
From the very first moment, since 2017, Trilantic assures that its strategy is to make profitable abroad all the business knowledge that Pacha has in the entertainment world. He points out the source of the investment fund, it doesn’t make sense for a world-renowned brand to collect almost all of its revenue (98%) in Ibiza: in this sense, the aim is to develop its full potential beyond the island. Various companies have already “knocked on the door” to show their interest in the brand and are drawing attention to this expansion strategy from the investment group. A spokesperson for Universo Pacha warns that it has not yet been decided who it will be and how it will be done: “There is no certainty yet. This possibility is being explored. It depends on who ultimately decides to participate. So that potential investors can see if they are interested in this project and involve them in some way.” Depending on who’s interested, one approach or another will be set up”, for example when asked if the new partner will take over, he replies. part of the shareholding package.
And will Trilantic continue to lead Pacha when it finds its new collaborator, or will it consider divesting? That has not been decided either: “The goal now is to find someone to accompany the development of this project. But talking about it now would be speculation. We are at the beginning of this process,” explains the spokesperson. Trilantic Europe invests in a wide variety of businesses, from Pirelli tires to Rome airport. At the time, it also chose Talgo and Euskaltel, where both companies divested their shares (in part in the case of Talgo) after clearing and upgrading their structures.
Second worst-performing Ibiza company in the pandemic
It is denied from Universo Pacha that the huge blow to the finances of covid is the root of the search for an investment partner. The company went from sales of 47.4 million euros in 2019 to 4.2 million euros (-91%) in 2020. During this time, its results fell 6,432%: from the pre-pandemic green numbers (587,000 euros) to the very red numbers (-37.1 million euros) in 2020. While it was the fourth most solvent Ibiza business in 2019, it was second with the most losses a year later, although everything showed they would reverse the results of the covid crisis-torn months of closure with “extraordinary” results this summer.
But 2020 and 2021 (terrible) were two bad years “no” is the reason they wanted a partner, they insist from the company: “Fortunately, Universo Pacha structurally had the bellows to withstand the situation caused by covid. And also received a government loan [18 millones de euros para paliar los efectos de la crisis derivados de la pandemia]. Be careful, this is not a bailout: it is a loan with conditions (just as if it were loaned by a bank) that must be fully repaid if part of Universo Pacha is sold.
Pacha has recovered the business’ pre-pandemic levels this summer after living on the edge in 2020 and 2021. For example, in the first year of covid, the workforce was reduced to 170 a year ago and 56 permanent jobs when it reached another. 48 temporary. In 2018, it had a total of 196 permanent employees.
It also increased its indebtedness by 14.7 percent to around 99 million euros in 2020 (the latest known public data on its finances).
Only Urgell’s daughter remains
Trilantic ‘saved’ Talgo, Euskaltel and other companies and sold them after optimizing them. Only a small mark remains in the shares of the founder of Pacha: 10%. And not on behalf of Ricardo Urgell, but on behalf of his daughter, Iria Urgell Calderón. “The time came when my kids weren’t for work, they didn’t become fans of the night and disco. So I thought ‘sell’,” said Ricardo Urgell, two years after he paid La Vanguardia nearly 300 million fees for the disco. frame) almost half a century ago in Ibiza (and recently Sitges) from scratch. Leaving his “toy” hurt Urgell (or so he says): “But that’s what he had to do. […] I sold it with all the pain of the world, but the heirs accepted.” Only his daughter Iria is still connected with the business.
The former owner had already warned in that interview about the mutual funds that he gave the keys to the nightclub on 8 d’Agost Street: “Without a soul or a heart, they just look at the numbers. Then they sell again. what they bought”.
In the case of Trilantic Europe, this would not be the first. For example, it became a shareholder of Euskaltel in December 2012 and sold all its assets in July 2015. The Fund “acted as a catalyst for Euskaltel’s transformation”, “management has successfully executed a comprehensive transformation plan that improved operational functions, led to the internalization of high value-added functions, outsourcing of non-strategic activities, optimization of the mix of sales channels and after-sales functions.” and to review its inner workings and, according to Trilantic’s own website, the refocusing of network deployment and its “strategy with the customer” have been changed. Then he sold it.
Something similar happened in Talgo. He came to this rail company in March 2006 and partially divested itself of its shares when it went public in 2015: “In 2006 Talgo had a stake torn apart by its divergent interests and desire for liquidity.” Thanks to the investment fund, “Talgo has succeeded in institutionalizing and professionalizing the family business through a more stable shareholder base, the arrival of value-added independent board members with extensive experience in the industry worldwide, and the strong management support of Trilantic Europe.” From its “reference shareholder” position, it continues to “actively support Talgo on all operational, commercial and financial fronts”. Perhaps this is one of the possible solutions considered in the case of Universo Pacha.
There are more cases in his history where he left companies he had bailed out or invested in. For example, MWBrands (entered in March 2006, left in 2010 after selling to a food company) or Mediclinic International (entered in May 2008, left in December 2012 after selling his shares to a pension fund, among others).