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Goldfarb Increase in Stake Presentation
1. PDG Realty increases its stake in
Goldfarb to 75%, and acquires an option
to purchase an additional 5%
Investors Relations:
Michel Wurman
Investors Relations Director
João Mallet
Investors Relations Manager
Gustavo Janer
IR Analyst
Telephone: +55 (21) 3504 3800
E-mail: ri@pdgrealty.com.br
Website: www.pdgrealty.com.br/ir
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2. Agenda
Deal Rationale
Increase of PDG Realty´s stake in Goldfarb
PDG Realty Business Model
Final Comments
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3. Deal Rationale
Consolidation of PDG Realty´s position as one of the leaders in operations within the mid
and mid-low income segment.
Opportunity to accelerate investments in the market segment with the largest repressed
demand on Brazilian real estate market.
Investment in a company with proven execution capacity and great potential growth.
Stake acquisition based on accretive valuation.
Arbitrage opportunity on discounts between listed companies versus private equity
investments.
Reaffirm and reiterate the strategic alignment between the current shareholders of
Goldfarb and PDG Realty.
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4. Increase to 75% of PDG Realty´s stake in
Goldfarb
The company has over 40 years of experience and is one of the largest
developers and homebuilders in the country focused in popular and economic
units.
Successful business model based in 3 main principles:
– Focus in market segment (popular and economic units).
– Standardization of the development process resulting in low operational
costs.
– Production and sales verticalization.
One of the largest Caixa Econômica Federal associative credit operators.
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5. Increase to 75% of PDG Realty´s stake in
Goldfarb
In Goldfarb’s original strategic business plan, 5 to 5.5 thousand units were expected to be
launched in 2007, 7 thousand units in 2008 and 10 thousand units in 2010.
After the recent capitalizations of the company, its strategic business plan was reviewed:
Goldfarb expects to launch 7 to 8 thousand units in 2007 and 9.5 to 10.5 thousand units
already in 2008.
Expected Units to be launched- Goldfarb (thousand units launched)
12000
9.5 - 10.5
10000
8000 7.0 - 8.0
7.0
6000 5.0 -5.5
4000
2000
0
2007 2008
Original Strategic Plan Review 5
6. Increase to 75% of PDG Realty´s stake in
Goldfarb
Goldfarb is exclusively focused in the market segment that concentrates the biggest and most promising
consumer demand (popular and economic).
Number of Residences (2006) Main Competitors Target-segment
Habitational
Deficit
1.7 million 4% > 20 MW
3.7 million 7% 10 < > 20 MW
8.7 million 18% 5 < > 10 MW
37.3 million 71% <5 MW
Total Residencies: 51.6 million
MW: Minimum Wage 6
7. Acquisition Structure
• We are increasing, once again, our stake in Goldfarb by 5% reaching 75%.
• PDG Realty’s acquisition structure will be concluded as follows:
- Assuming an equity value of R$ 800 million for Goldfarb, PDG Realty will increase its capital by
R$100 million, issuing shares representing 3.33%. Consequently, PDG Realty's stake in Goldfarb will reach
73.33%.
- Goldfarb’s current shareholders will increase the capital of a holding company by which they
will hold 100% of the company, paid up through issue of common shares by Goldfarb equivalent to 1.67%
of its capital.
- PDG Realty will incorporate the holding company by increasing its capital and issuing 681,818
new common shares.
• The holding shareholders are subject to a 9 month lock up period of 75% of their shares, with 25% of the
shares being unlocked on a quarterly basis.
• Furthermore, PDG Realty now holds an option with expiration in December 31, 2008 to acquire an
additional 5% stake of Goldfarb, reaching 80%. The option will be exercised in the same terms as the ones
described above: considering an equity value of R$900 million, PDG Realty will increase Goldfarb’s capital by
R$100 million and issuance of 1,136,364 shares of PDG Realty.
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8. Successful track record
PDG Realty´s track record proves its ability to continuously originate co-developments and private
equity opportunities.
Additional Acquisition of
acquisition 14,5% stake
JV of 21%
JV Acquisition Joint Venture
Set-06
of 20% stake PDG & Abaurre
Private JV
Acquisition of
Equity... Acquisition of Joint Venture 30% stake
40% stake CHL & PIAL
Additional JV Additional
Feb-06 acquisition acquisition
of 10% Sale of of 5%
JV April-07
May-06 Nov-06 Feb-07 20% stake
Set - 07
June-07 August-07
44 projects launched July - 07
21 projects launched
14 projects launched R$ 250 mm
2003 -2006 2Q07
1Q07 Debenture
issuance
IPO
...and co-development
Jan-07 investments.
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9. Portfolio Investments
Even in a competitive environment PDG Realty was able to make important acquisitions in accretive
deals.
Current portfolio enables strong presence in all market segments:
Rental Income
Mid to low income Mid to high income Land parceling Services
Properties
Part.: 75%
Focus: São Paulo, Rio de Janeiro Part: 17% Part.: 50% of a joint venture Part: approx. 14,5%
and Espirito Santo Focus: São Paulo Focus: São Paulo Focus: São Paulo, Rio de
Part: 17% (indirect)
Janeiro, Bahia, Minas Gerais
Focus: São Paulo
and Rio Grande do Norte
Part: 50%
Focus: Rio de Janeiro JV
Joint Venture
Focus: Rio de Janeiro
Part: 50% of a joint venture
Focus: Bahia
JV
Joint Venture
Focus: Niteroi, RJ
JV
Joint Venture
Focus: Espirito Santo
Part: 30% 9
Focus: Argentina
10. Closing Remarks
Flexibility to capture a large range of investment opportunities and
Flexibility market trends
Expertise and capacity to invest in different:
– Geographic regions
Diversification – Markets
– Income segments
Count on the best
Ability to “hire” the best management in the industry and leverage on
management teams in their specific and local knowledge
the industry
Additional capital gain Capital gain potential from portfolio investments since PDG will help its
potential invested companies to grow and access equity capital
Management with strong real estate expertise, financial background
Management expertise and return oriented culture to implement PDG Realty´s business
strategy
The right platform to accomplish a sustainable long term growth
Unique business model in the Brazilian real estate market 10