2. Purchase Proposal of Lopes Trademark
Gains Through the Lopes Trademark Aquisition:
Improving Corporate Governance and alignment of interests
between shareholders.
Acquisition of one of the most recognized brands in the market
without the need for investment in a new brand.
Fair value of the Acquisition and that adds value to the Company.
2
3. The committee established to solve this
2011 issue consists of:
is half the length of the • Alcides Tápias
contract • Martín Lifchitz
• Maurício Almeida Prado
1
The approval of the transaction will
take place in the General Shareholders
Meeting with a vote of minority
shareholders only.
Brand Rating from Price
three out of “The Big Although the CEO and COO of the
Negociation Company do not have any direct
Four” through the economic relationship with the
KPMG
Minimum ownership of the brand nor the result of
Price Average = this operation, they will choose to abstain
E&Y Terco R$44.7 MM* from their vote in the, as well as
abstained from the decision making
process of the previous steps.
* 30% in cash and 70% in stocks or cash, according to the company. 3
* 120 days Lock-up after settlement of the transaction to Rosediamond, Marcos Lopes and Francisco Lopes (direct or indirectly).
4. Lopes Brand Recognition
Lopes is now the 25th most valuable brand in Brazil
Lopes Brand
Value:
R$ 87 million
4
Source: Interbrand
5. Investment for Launching New Brands in Brazil – Benchmarks*
Values in R$million
Year 1 28.1
Year 1 18.8
Year 2 19.7
Year 2 81.6
Year 1 54.7 Year 1 107.8
Year 2 36.6 Year 2 172.7
Year 1 31.2 Year 1 167.8
Year 2 21.8 Year 2 26.5
Year 1 40.6 Year 1 49.6
Year 2 11.3 Year 2 32.0
The multinational agency Borghierh/Lowe, has two offices in Brazil, is the 3rd in the Ibobe Ranking Monitor, with 23
clients in its portfolio, such as: Unilever, Ministério da Saúde e Johnsons&Johnsons. It was founded in 2005 by Jose
Borghi and Erh Ray - both recognized by the market and winner of many Cannes awards, besides haven taken
part of the festival’s jury.
5
* Source: Borghierh/Lowe
6. Lopes Brand Valuation Summary
Independent auditing companies valuation results:
Minimum Maximum
R$ MM R$ MM
56.8 87.6
April /11
40.6 60.4
April /11
Average of the
36.8 43.3
Maximum = 63.8
May /11
Value to be paid
Average:
54.3
Average of the
Minimum = R$44.7 million
Royalty Relief Method –
standard method for IFRS
accounting
* The valuation reports are available for shareholders. Please contact
the IR department. 6
7. Benefits from the End of the Current Royalties Contract
The present value1 of the payments of the current contract added to a hypothetical renewal
in 2016, maintaining the same CAGR2 and perpetuating at ¼ of the current CAGR, is R$54.1
million, R$9,4 million higher than the acquisition value.
Financial Benefit
R$ millions
9.4
54.1
44.7
Value to be paid Present Value of Current Financial Benefit
Royalties Contract
Considers the renewal of the current contract for 10 more years growing by CAGR during the
period of the contract - from 2009 to 2016 - and ¼ of this same CAGR in the perpetuity.
1- Present Value using the average rate of the three evaluating companies with no inflation 7
2- CAGR without inflation.
