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PDG Realty raises its stake in
     Goldfarb to 70%

                Investors Relations:

                   Michel Wurma...
Agenda




Deal Rationale

Increase PDG Realty´s stake in Goldfarb

Valuation

PDG Realty Business Model

Final Comments

...
Deal Rationale




Consolidate PDG as a market leader in launching volume in the lower and middle-lower
income segment

In...
PDG Realty increases its stake in Goldfarb




The company has over 40 years of experience and is one of the largest devel...
PDG Realty increases its stake in Goldfarb



Unlike most players, Goldfarb is exclusively focused in the market segment t...
Acquisition Structure



 Equity acquisition of 21% of Goldfarb through capital increase and equity purchase from
 remaini...
Acrretive Valuation




 PDG Realty (as of 30/04/07)
 # of shares                                                         ...
PDG Realty presents an unique business model on the
Brazilian Real State market.



                                    Co...
Proven track record


 Deal flow guarantee: landbank (PDG Realty’s share) amounts to R$ 2.3 billion
 Potential capital gai...
Portfolio Investments


         Even in a competitive environment PDG Realty was able to make important acquisitions in a...
Closing Remarks


                              Flexibility to capture a large range of investment opportunities and
     ...
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PDG raises its stake on Goldfarb to 70%

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PDG raises its stake on Goldfarb to 70%

  1. 1. PDG Realty raises its stake in Goldfarb to 70% Investors Relations: Michel Wurman Investors Relations Director João Mallet Investors Relations Manager Telephone: (21) 3504 3800 1 E-mail: ri@pdgrealty.com.br Website: www.pdgrealty.com.br/ri
  2. 2. Agenda Deal Rationale Increase PDG Realty´s stake in Goldfarb Valuation PDG Realty Business Model Final Comments 2
  3. 3. Deal Rationale Consolidate PDG as a market leader in launching volume in the lower and middle-lower income segment Investment opportunity in segment with the largest repressed demand Company with considerable growth potential and proven execution capacity Accretive valuation Arbitrage opportunity on discounts between listed companies versus private equity investments Validate and ground the strategic alignment between the current shareholders of Goldfarb and PDG Realty 3
  4. 4. PDG Realty increases its stake in Goldfarb The company has over 40 years of experience and is one of the largest developers and homebuilders in the metropolitan area of São Paulo 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 The company owns a exclusive brokerage firm (Avance) with approximately 100 brokers, one of the largest in São Paulo´s metropolitan area In 2007, Goldfarb expects to launch between 5 and 6 thousand units, reaching 10 thousand units in 2009. 4
  5. 5. PDG Realty increases its stake in Goldfarb Unlike most players, 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 Positioning Habitational Deficit 1.7 million 4% > 20 mmw 3.7 million 7% 10 < > 20 mmw 8.7 million 18% 5 < > 10 mmw 37.3 million 71% <5 mmw Total Residencies: 51.6 millions 5
  6. 6. Acquisition Structure Equity acquisition of 21% of Goldfarb through capital increase and equity purchase from remaining partners To be paid as follows: – Capital increase of R$80 million, subscribed solely by PDG – Acquisition, by PDG Realty, of a holding company which owns 12.5% of Goldfarb’s capital stock, by the issuance of 5,040,000 PDG´s shares to be subscribed by the remaining shareholders of Goldfarb’s – A lockup period of 3 years for this PDG´s shares, with quarterly proportional sales of up to 8.33% of total position • Following the aquisition PDG Realty will hold 70% of Goldfarb´s total shares 6
  7. 7. Acrretive Valuation PDG Realty (as of 30/04/07) # of shares 110.652.081 Price per share R$ 14,10 Market Cap. R$ 1.560 million Estimated P/E 2008 x * 8,6 Goldfarb Deal Net profit estimate for Goldfarb for 2008 R$80 million Goldfarb estimated P/E 2008 x 6,1 Peer Comparison: Rodobens estimated P/E 2008 x * 11,3 Discount Discount Private equity vs. PDGR3 Private equity vs. RDNI3* P/E ’08 17,5 x Rodobens PDG Discount 2,5x Discount P/E´08 Goldfarb P/E´08 5,2x 11,3x 8,6x P/E ’08 P/E´08 5 ,6x P/E´08 Goldfarb P/E ’08 6,1x 5,6x P/E ’08 5x 6,1 x * * Based on the market expectations and PDG Realty evaluations when referred to Goldfarb 7
  8. 8. PDG Realty presents an unique business model on the Brazilian Real State market. Coverage in all income segments with leading brands Market Segmentation: residential development, land parcelling and Diversification Strategy income oriented projects Geographic Presence: 26 cities in 3 states (SP, RJ e BA) Strong presence on the low-income segment Steady landbank expansion since the IPO Growth Perspectives Development capacity fueled by partnership business model “White Label” real state PDG Realty is not perceived on the market as a competitor… company … because it brings a complementary expertise to its partners Alignment of interests between shareholders and management Unique return-oriented corporate company Business Model allows “hiring” the best management in the real state market 8
  9. 9. Proven track record Deal flow guarantee: landbank (PDG Realty’s share) amounts to R$ 2.3 billion Potential capital gains: Following a private equity model, PDG will encourage and help its invested companies to grow and access capital markets. Additional acquisition JV of 21% JV Set-06 Acquisition Private Equity and... of 20% Acquisition of stake 40% stake Additional Feb-06 acquisition JV of 10% April-07 May-06 Nov-06 Feb-07 5 projects launched 28 projects launched Founding 2004 12 projects launched 2006 2003 1º Q/2007 ...co-development 2 projects launched IPO investments. 9 projects launched 2003 2005 Jan-07 9
  10. 10. Portfolio Investments Even in a competitive environment PDG Realty was able to make important acquisitions in accretive deals PDG Realty´s track record proves its ability to continuously originate co-developments and private equity opportunities Middle to high Rental Income Low Income Land parceling Services income Properties JV Part.: 70% Part: 17% Focus: São Paulo and Rio de Focus: São Paulo Part: 17% (indirect) Part.: 50% of joint venture Janeiro Focus: São Paulo Focus: São Paulo Part.: 20% Focus: Rio de Janeiro Part: 50% Focus: Rio de Janeiro Part AVANCE.: 49% Focus: São Paulo and Rio de JV Janeiro Part: 50% of joint venture Focus: Bahia 10
  11. 11. 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 11

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