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Lopes acquires 75% of the largest real estate Lopes acquires 75% of the largest real estate broker in the South Region of Brazilbroker in the South Region of Brazil**
* in sales volume
Francisco Lopes – COORoberto Amatuzzi – CFO - IR
Forward Looking Statements
This presentation does not constitute an offer, or invitation, or solicitation of an offer to subscribe for or
purchase any securities neither does this presentation nor anything contained herein form the basis to any
contract or commitment whatsoever.
The material that follows contains general business information about Lopes – LPS Brasil – Consultoria de
Imóveis S.A related to the acquisition of Dirani Investimentos Imobiliários Ltda. It is not intended to be
relied upon as advice to potential investors. The information does not purport to be complete and is in
summary form. No reliance should be placed on the accuracy, fairness, or completeness of the information
presented herein and no representation or warranty, express or implied, is made concerning the accuracy,
fairness, or completeness of the information presented herein.
This presentation contains statements that are forward-looking and are only predictions, not guarantees of
future performance. Investors are warned that these forward-looking statements are and will be subject to
many risks, uncertainties, and factors related to the operations and business environments of Lopes – LPS
Brasil – Consultoria de Imóveis S.A and its subsidiaries such as competitive pressures, the performance of
the Brazilian economy and the industry, changes on market conditions, among other factors disclosed in
Lopes – LPS Brasil – Consultoria de Imóveis S.A filed disclosure documents. Such risks may cause the actual
results of the companies to be materially different from any future results expressed or implied in such
forward-looking statements.
Lopes – LPS Brasil – Consultoria de Imóveis S.A believes that based on information currently available to
Lopes – LPS Brasil - Consultoria de Imóveis S.A management, the expectations and assumptions reflected
in the forward-looking statements are reasonable. Lastly, Lopes – LPS Brasil – expressly refuses any duty to
update any of the forward-looking statements contained herein.
Agenda
I. Strategic Opportunity for Expansion
II. Dirani: Largest sales operation in the South Region of
Brazil*
III. Markets – Porto Alegre and Curitiba
IV.Acquisition Structure
V. Closing Remarks
*largest real estate broker in contracted sales volume
Strategic Opportunity for Expansion
Strategic Opportunity for Expansion
Lopes acquires 75% of the largest real estate broker in sales volume in the South Region of Brazil, entering simultaneously both in the Parana and Rio Grande do Sul markets.
Dirani is recognized as one of the most respectful real estate brokers in the South Region of Brazil, having an important market share in Porto Alegre and operating in Curitiba since late 2006.
Attractive acquisition model with significant discounts in relation to Lopes P/E multiple.
Significant part of the price tied to performance through an earn out process in the first 3 years for the acquired 75%.
Possibility of acquisition of the remaining 25% through call/put options.
This opportunity enables Lopes to accelerate its geographic expansion, strongly entering the South Region market, the largest in the country after the Southeast Region.
The South Region market, except for Porto Alegre, is currently fragmented in the real estate brokerage business, which adds a significant growth potential to this transaction.
Lopes consolidates its positioning as the largest player in the Brazilian real estate brokerage industry, a step forward in the development of its geographic expansion strategy started with the Business Units in Rio de Janeiro and Alphaville – Gated Communities.
Attractive opportunity also due to the similarities between the companies’ business models in terms of service levels, quality focus, client care and organizational culture.
DIRANI: Largest sales operation in the South Region of Brazil *
* largest real estate broker in contracted sales volume.
Dirani
12 years of operations and current leader in the contracted sales market.
Structured business model, operating with average gross commissions rate of 4% plus premium (up to 1%).
Management widely recognized in the South Region, headed by Rogerio Dirani, senior executive for the organization.
Consolidated operations:
– Very promising launchings pipeline amounting to R$ 700 million in 2007.
– Awards: Top Marketing ADVB 2003 and Top Marketing ADVB 2006.
2005 2006 2007*
61161
320160 %
100 %
*Intermediate GSV estimated by Dirani for 2007
Sales Contracted R$ MillionSales Contracted R$ Million
Dirani
Consolidated operations in Porto Alegre and Curitiba.
Headquarters in Porto Alegre1
Headquarters in Curitiba2
Reception Desk in Porto Alegre
Operations Area in Porto Alegre
Show Room of a Unit launched in Porto Alegre
Hall in Curitiba2
1 Building where Dirani’s main sales office is located2 Building where Dirani’s headquarter is located
A Dirani
Developer-clients with national reach and greatly recognized in the local markets
Allem Ivo Rizzo Terra Ville
Bortoncello MaxCap Thá
Capa Mistral Uma
Forma Oslo Zaman
Gafisa Rossi
Grupo KUHN Tedesco
Markets – Porto Alegre and Curitiba
Markets
Porto Alegre Porto Alegre – Second largest launchings market outside the Rio/São Paulo region.– Very similar market compared to São Paulo:
Served by nationwide players (Gafisa, Rossi and Cyrela) and a trend of consolidation in large scale real estate brokers
Launchings pipeline oriented to middle and upper-middle classes Highly liquid real estate products
CuritibaCuritiba– Fragmented launchings market with an absence of large real estate brokers,
despite the significant volume of sold and launched GSV.– In demographic terms, Curitiba is expected to continue attracting middle-
class migratory flows from all over the country in the coming years.– Recovering real estate market, with an improved supply/demand balance.
Launchings Show Rooms
Acquisition Structure
Multiples
DIRANI ValuationDIRANI Valuation
Earn out with cap and floor aligns interests and takes the acquisition to a very accretive valuation range.
9.0x P/E 2008
7.5x P/E 2008
Acquisition P/E
Transaction ValuesTransaction Values
Initial payment of R$ 15.1 million (NPV) in five semi-annual installments until may of 2009.
Remaining amount to be paid in two variable installments tied to the net income for the past 36 months in may 2010.
Estimated value for the transaction – Base Case Scenario - R$ 28 million1.
1based upon cash flow projections with no guarantee of future performance.
Closing Remarks
Closing Remarks
Local expertise Rio Grande do Sul + Paraná Leading management and
sales force Relationship with local and
nationwide players
Consolidated relationship with national real estate developers
Proven product development capacity
Corporate Governance Actions IT Structure (SAP) Nationally relevant player with
state-of-the-art practices
+ =
Leading company to serve nationwide real estate developers in the South and Southeast regions of the country.
High growth potential due to market fragmentation.
Consolidated platform to serve other cities in the region.
Reception Desk in Porto Alegre
Meeting Room in Porto Alegre
Launchingst Sales Stand in Porto Alegre
