Form
6-K
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Report
Of Foreign Private Issuer
Pursuant
To Rule 13a-16 Or 15d-16 Of
The
Securities Exchange Act Of 1934
For
the
month of October, 2007
Commission
File Number: 001-14950
ULTRAPAR
HOLDINGS INC.
(Translation
of Registrant’s Name into English)
Avenida
Brigadeiro Luis Antonio, 1343, 9ºAndar
São
Paulo, SP, Brazil 01317-910
(Address
of Principal Executive Offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F:
|
Form
20-F
|
X
|
Form
40-F
|
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1):
|
Yes
|
No
|
X
|
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7):
|
Yes
|
No
|
X
|
Indicate
by check mark whether by furnishing the information contained in this Form,
the
Registrant is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
|
Yes
|
No
|
X
|
If
“Yes”
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
N/A
ULTRAPAR
HOLDINGS INC.
TABLE
OF CONTENTS
|
ITEM
|
|
|
1.
|
Public
Offer Notice for the Acquisition of Common Shares issued by Companhia
Brasileira de Petróleo Ipiranga
|
|
2.
|
Tombstone
advertisement published in The New York Times on October 9,
2007
|
|
3.
|
Deutsche
Bank Securities Inc. Valuation
Report
|
Item
1
Exhibit
I - Draft Public Offer Statement
THE
OFFER
MADE IN THIS NOTICE IS ADDRESSED TO ALL SHAREHOLDERS OF COMPANHIA
BRASILEIRA DE PETRÓLEO IPIRANGA IN BRAZIL. ADDITIONALLY, SHAREHOLDERS OF
COMPANHIA BRASILEIRA DE PETRÓLEO IPIRANGA DOMICILED OUTSIDE BRAZIL MAY PARTAKE
IN THE OFFER, SUBJECT TO THE CONDITION THAT SUCH SHAREHOLDERS COMPLY WITH
THE
LAW AND REGULATIONS OF THE JURISDICTION IN WHICH THEY ARE LOCATED.
PUBLIC
OFFER NOTICE FOR THE ACQUISITION OF COMMON SHARES ISSUED BY COMPANHIA BRASILEIRA
DE PETRÓLEO IPIRANGA
Publicly-held
Company - CVM nº 00286-0
National
Register of Legal Entities (CNPJ/MF) enrollment No.
33.069.766/0001-81
ISIN
Code
BRPTIPACNOR4
FOR
AND ON BEHALF OF
ULTRAPAR
PARTICIPAÇÕES S.A.
BRADESCO
S.A. CORRETORA DE TÍTULOS E VALORES MOBILIÁRIOS (the “Intermediary
Institution”), a financial institution with headquarters located at Avenida
Paulista, 1450, 7º andar, City of São Paulo, State of São Paulo and enrolled
with the National Register of Legal Entities (CNPJ) under No.
61.855.045/0001-32, and BANCO BRADESCO BBI S.A. (the “Offer
Financial Advisor”), a financial institution with headquarters located at
Cidade de Deus, Prédio Novíssimo, 4º andar, Vila Yara, in the City of Osasco,
State of São Paulo and enrolled with the National Register of Legal Entities
(CNPJ) under No. 06.271.464/0001-19, for and on behalf of ULTRAPAR
PARTICIPAÇÕES S.A., a publicly-held company with headquarters located
at Avenida Brigadeiro Luiz Antônio, 1343, 9º andar, in the City of São Paulo,
State of São Paulo, enrolled with the National Register of Legal Entities (CNPJ)
under No. 33.256.439/0001-39 (the “Offerer” or “Ultrapar”), hereby
submit to the shareholders of COMPANHIA BRASILEIRA DE PETRÓLEO
IPIRANGA (“CBPI”), a publicly-held company with headquarters
located at Rua Francisco Eugênio, 329, in the City of Rio de Janeiro, State of
Rio de Janeiro, enrolled with the National Register of Legal Entities (CNPJ)
under No. 33.069.766/0001-81, this public offering (the “Offer”) to
acquire up to the entirety of the common shares issued by CBPI (the “Shares”),
under the rules established by the Brazilian Security and Exchange Commission
(Comissão de Valores Mobiliários – “CVM”) Instruction No. 361, dated
March 5, 2002, (the “CVM Instruction 361/02”) for the purpose of and
pursuant to the following conditions:
1. THE
OFFER
1.1. Legal
Basis. The Offer is being made as a result of the disposal of control over
CBPI to the Offerer, as established in article 254-A of Law 6,404, dated
December 15, 1976, as amended (the “Brazilian Corporate Law”) and by CVM
Instruction 361/02. Disposal of a controlling stake in CBPI was
announced
1
Item
1
Exhibit
I - Draft Public Offer Statement
to
the
market in the relevant facts disclosed on March 19, 2007 and April 18, 2007,
which are summarized in Section 5 of this Offer Notice (the
"Notice").
1.1.1. The
Offer complies with the procedures applicable to public offerings to acquire
shares due to disposal of control in publicly traded companies as set forth
in
CVM Instruction 361/02.
1.2. Format.
This Offer will be concluded via an auction (the “Auction”) at the São
Paulo Stock Exchange ("BOVESPA"). This Offer is not subject to any
requirement for minimum acceptance levels and the Offerer shall purchase
all
Shares offered during the Auction.
1.3. Validity.
This Offer shall remain in effect for a period of 30 (thirty) days, from
the
date that this Notice is published, i.e. it shall come into effect on October
9,
2007, and shall expire on November 8, 2007, on which date the Auction shall
be
held (the "Auction Date"). The Offer period shall not be extended beyond
the Auction Date.
1.4. Shares
Encompassed by the Offer. The Offerer hereby agrees to purchase up to the
entirety of the 3,013,918 Shares issued by CBPI and currently outstanding
on the
market, through the Intermediary Institution, which are equivalent to 8.5%
of
the Shares issued by CBPI.
1.4.1. By
accepting to sell Shares owned by them pursuant to the terms of this Offer,
the
shareholders hereby declare that such Shares are free and unencumbered of
any
burden, right in rem, or any other form of encumbrance that may bar the
full and immediate exercise of ownership by the Offerer over such Shares,
and
that they comply with the trading requirements established in BOVESPA
regulations.
1.4.2. In
the event that CBPI declares dividends and/or interest on own equity during
the
period between the Auction Date and the date that the Shares offered during
the
Auction to the Offerer are effectively transferred, the respective payments
shall be made pursuant to article 205 of Brazilian Corporate Law to the owner
of
the Shares on each date that dividends and/or interest on own equity are
declared.
1.5. Offer
Price. The Offerer agrees to acquire the Shares for the price of R$ 64.43
per share, corresponding to 80% of the price indirectly paid to the controlling
shareholders of Distribuidora de Produtos de Petróleo Ipiranga S.A.
(“DPPI”) for each common share representing the controlling stake in CBPI
indirectly held by them, as stated in the Justified Statement of the Purchase
Price Calculation Format (the “Offer Price”), restated by the variation
in the Reference Rate (Taxa Referencial– “TR”) (365 day basis)
calculated on a pro-rated basis from the Closing Date (as defined in item
5.3)
up to the Auction financial settlement date.
1.5.1. The
Offer Price shall be paid in cash, in Brazilian legal currency, on the Auction
financial settlement date.
2
Item
1
Exhibit
I - Draft Public Offer Statement
1.6. Consequences
of Accepting the Offer. Upon accepting this offer, each CBPI shareholder
agrees to dispose of the ownership over its Shares, including all direct
rights
inherent to such Shares, pursuant to the terms and conditions set forth
herein.
2. THE
AUCTION
2.1. Auction
Date. The Auction shall be held on November 8, 2007, at 1.00P.M. (São Paulo
local time), via MEGABOLSA, the BOVESPA trading system.
2.2. Acceptance
Procedures. By 12.00 p.m. (São Paulo local time) on the Auction Date, the
Brokers (as defined in Section 3.1 below), representatives of the shareholders
wishing to offer their Shares during the Offer shall register the number
of
Shares held directly on the MEGABOLSA system using the code PTIP3L and which
will be sold by the shareholders they are representing during the Auction.
Offer
acceptance, and the subsequent firm offer to sell the Shares, shall be deemed
irrevocable and irreversible from commencement of the Auction, to the extent
that Offer acceptance shall create an obligation on the accepter to dispose
of
its Shares and for which acceptance has been issued, in the form and subject
to
the terms set forth in this Notice.
2.3. Third
Party Buying Interferences. Any third party shall be entitled to make a
competing offer to acquire all or part of the Shares, subject, however, to
the
following:
(i)A
competing offer shall be registered with the CVM pursuant to the terms of
CVM
Instruction 361/02; and
(ii)The
value
of the first competing purchase offer shall be at least 5% higher than the
last
price offered.
2.4. Brokerage
Costs and Commissions. All brokerage costs and commissions relating to the
disposal of the Shares shall be borne by the respective selling shareholders.
All brokerage costs and commissions related to the purchase of the Shares
shall
be borne by the Offerer.
2.5. Broker
Representing the Offerer. Bradesco S.A. Corretora de Títulos e Valores
Mobiliários (the “Offerer Broker”) shall be the Offerer’s representative
during the Auction.
3. AUCTION
REGISTRATION
3.1. Registration
in a Brokerage House. CBPI shareholders wishing to take part in the Auction
shall register with the Offerer Broker or any other brokerage company authorized
to trade on BOVESPA (each individually referred to as “Broker” and
collectively as the “Brokers”) from the date this Notice is published up
to 5.00 p.m. on November 7, 2007, the business day immediately preceding
the
Auction Date (the “Registration Period”). Auction participation shall
comply with the requirements established in BOVESPA and Companhia Brasileira
de
Liquidação e Custódia (“CBLC”) Transaction regulations, as well as the
requirements set forth in Section 3.
3
Item
1
Exhibit
I - Draft Public Offer Statement
3.1.1. Shareholders
not registered with a Broker shall present the Broker with a certifyed copy
of
each of the following documents in order to carry out their registration,
as
applicable:
(i) Individuals.
Identity Card, National Taxpayer’s Enrollment Card (CPF) and proof of address.
Representatives of estates, minors and those civilly disabled and shareholders
represented by an attorney shall also present documentation granting powers
of
representation and original documents or certified copies of the
representative’s Identity Card and National Taxpayer’s Enrollment
Card;
(ii) Legal
Entities. By-laws or articles of incorporation, National Register of Legal
Entities (CNPJ) card, company documents granting powers of representation
and
original documents or certified copies of the Identity Card and National
Taxpayer’s Enrollment Card of the legal entity’s representative.
4. SETTLEMENT
4.1. Financial
Settlement. Offer financial settlement shall be carried out on the 3rd
business day following the Auction Date (the “Settlement Date”), pursuant
to the rules established by the CBLC for gross settlement.
4.2. Settlement
Method. Auction settlement shall be carried out by the CBLC using
the gross settlement method, as defined in Chapter VII of the CBLC Operating
Procedures. CBLC shall not act as an Auction settlement central
guarantor counterpart. CBLC shall act as a facilitator of Auction settlement
pursuant to this Offer, including (a) the receipt of Offerer funds and Shares
from shareholders who have sold their Shares during the Offer, via their
custody
agents; (b) onlending Offerer funds to shareholders offering their Shares
during
the Offer and (c) the onlending of the Shares to the Offerer.
4.2.1. Subject
to the terms of the Intermediation Agreement (as defined in Section 4.3 below),
the Offerer’s settlement liabilities established herein shall be directly
fulfilled by the Offerer or by an entity from its economic group and, in
any
case, the Offerer shall remain wholly liable for and shall guarantee compliance
with all liabilities attributed to it in relation to the Offer and established
herein.
4.3. Guarantee.
Pursuant to the terms of the Intermediation Agreement executed by the
Intermediary Institution and the Offerer (“Intermediation Agreement”) and
paragraph 4, article 7 of CVM Instruction 361/02, the Intermediary Institution
shall guarantee the Offer financial settlement.
5. ACQUISITION
OF THE IPIRANGA GROUP AND CORPORATE RESTRUCTURING
5.1. Purchase
and Sale Agreement. On March 18, 2007, the Offerer entered into an
irrevocable and irreversible agreement with the controlling shareholders
(the
“Ipiranga Controlling Shareholders”) of the
4
Item
1
Exhibit
I - Draft Public Offer Statement
Refinaria
de Petróleo Ipiranga S.A. (“RPI”) and Distribuidora de Produtos de
Petróleo Ipiranga S.A. (“DPPI”), with Petróleo Brasileiro S.A.
(“Petrobras”) and Braskem S.A. (“Braskem”) as intervening parties,
to acquire all shares held by the Ipiranga Controlling Shareholders in RPI,
DPPI
and CBPI (the “Purchase and Sale Agreement”) on its own behalf and as
commission agent for and on behalf of Braskem and Petrobras to acquire
petrochemical assets, and in Petrobras’ case, certain distribution
assets.
5.1.1. The
Ipiranga Group businesses will be managed by Petrobras, Ultrapar and Braskem.
Ultrapar shall hold the fuel and lubricant distribution businesses located
in
the South and Southeast regions in Brazil (the “South Distribution
Assets”), Petrobras shall hold the fuel and lubricant distribution
businesses located in the North, Northeast and Mid-West regions in Brazil
(the
“North Distribution Assets”) and Braskem and Petrobras shall hold the
Petrochemical Assets, represented by Ipiranga Química S.A., Ipiranga
Petroquímica S.A. (“IPQ”) and the latter’s stake in Copesul – Companhia
Petroquímica do Sul (“Copesul”), in a proportion of 60% to Braskem and
40% to Petrobras (the “Petrochemical Assets”). The assets relating to oil
refinery operations held by RPI shall be shared equally by Petrobras, Ultrapar
and Braskem.
5.2. Transaction
Stages. The transaction is divided into five (05) stages: (i) acquisition of
the shares from the Ipiranga Controlling Shareholders by the Offerer; (ii)
a
mandatory tender offer as a result of disposal of control, for acquisition
of
common shares issued by RPI, DPPI, CBPI and IPQ (the “Tag Along POAs");
(iii) a public offering to cancel Copesul’s registration as a publicly traded
company; (iv) exchange offer by Ultrapar of shares issued by RPI, DPPI and
CBPI;
and (v) segregation of the South Distribution Assets, North Distribution
Assets
and Petrochemical Assets, and the consequent transfer of the Petrochemical
Assets to Braskem and Petrobras and the North Distribution Assets to
Petrobras.
5.3. Acquisition
of shares from the Ipiranga Controlling Shareholders. On April 18, 2007,
(the “Closing Date”) Ultrapar acquired shares issued by RPI, DPPI and
CBPI from the Ipiranga Controlling Shareholders representing the following
company stakes: (i) 66.2% of the common shares issued by RPI, (ii) 11.6%
of the
preferred shares issued by RPI, (iii) 69.2% of the common shares issued by
DPPI,
(iv) 10.5% of the preferred shares issued by DPPI, (v) 3.8% of the common
shares
issued by CBPI, and (vi) less than 0.1% of the preferred shares issued by
CBPI.
In addition, on April 23, 2007, Ultrapar acquired the common and preferred
shares issued by RPI and DPPI and common shares issued by CBPI from one of
the
Controlling Shareholders, representing less than 0.1% of the shares of the
respective class and type. The following table indicates the value per share
that was paid to the Ipiranga Controlling Shareholders:
|
Company
|
Share
|
Purchase
Price (R$/share)
|
|
RPI
|
Common
Restricted
|
132.85184
|
|
Common
Unrestricted
|
106.28147
|
|
|
Preferred
|
38.93000
|
|
|
DPPI
|
Common
Restricted
|
140.08671
|
|
Common
Unrestricted
|
112.06937
|
|
|
Preferred
|
29.57000
|
|
|
CBPI
|
Common
Unrestricted
|
58.10000
|
|
Preferred
|
20.55000
|
5
Item
1
Exhibit
I - Draft Public Offer Statement
5.4. Ultrapar
Corporate Restructuring. Following conclusion of the Tag Along
POAs, Ultrapar shall undertake a corporate restructuring in order to (i)
simplify the Ipiranga Group corporate structure, concentrating all of the
shareholders in a single company listed on the stock market, allowing for
a
reduction in costs and increased liquidity and (ii) permit segregation and
transfer of the Petrochemical Assets, North Distribution Assets and South
Distribution Assets (the “Corporate Restructuring”). Within this context,
Ultrapar shall incorporate the shares issued by RPI, DPPI and CBPI (the
“Share Exchange Offers”) pursuant to the terms of article 252 of
Brazilian Corporate Law. As a result of the Share Incorporations, RPI, DPPI
and
CBPI shall become wholly-owned subsidiaries of Ultrapar. Shareholders holding
preferred and any common shares of RPI, DPPI and CBPI shall receive preferred
shares of Ultrapar.
5.5. Segregation
of Assets. Upon conclusion of the Share Exchange Offers, Ultrapar shall (i)
reduce RPI's and CBPI’s capital stock in order to transfer the Petrochemical
Assets directly to Ultrapar, for future delivery to Braskem and Petrobras,
pursuant to the commission agency, and (ii) spin-off CBPI to transfer the
North
Distribution Assets to a company controlled by Petrobras.
5.6. CADE.
The transaction has been submitted to the Brazilian Anti-trust Authorities
(CADE
– Administrative Board for Economic Defense) , Secretary for Economic Rights
(SDE) and the Economic Oversight Office (SEAE). CADE has issued a writ of
prevention with a series of provisions on management of the assets
acquired. The provisions related to the Petrochemical Assets were effectively
reviewed on April 25, 2007, in a decision ratified by the CADE Full Session,
at
which time Braskem entered into an Agreement to Preserve Reversibility of
the
Transaction (the “APRO”). Such alterations being made, CADE accepted
Petrobras’ retention of a minority stake in Copesul after the acquisition.
Additionally, on May 16, 2007, another APRO was entered into for the fuel
distribution sector. This APRO establishes corporate governance rules
encompassing CBPI, in order to maintain distribution sector competition and
transaction reversibility relating to the Petrobras Assets. Please
note that these APROs do not affect the conclusion of the Offer.
6.
OFFER PRICE CALCULATION AND VALUATION REPORT
6.1. Offer
Price Calculation. The Offerer is making the Offer at a price equivalent to
80% of the price paid indirectly to the DPPI controlling shareholders per
each
common share in the controlling stake at CBPI held indirectly by them, pursuant
to the Justified Statement of the Purchase Price Calculation Format, for
the
purposes of article 254-A of Brazilian Corporate Law.
6.1.1 The
price of each of the common shares
issued by DPPI and CBPI indicated in the Justified Statement of the Purchase
Price Calculation Format and in the Purchase and Sale Agreement was defined
following a negotiation by independent and unrelated parties, based on their
evaluations and their own convictions of the market value of each of the
shares
negotiated. Specifically, the price
of the
controlling CBPI common shares was established, as mutually agreed by the
independent and unrelated parties, by applying a percentage equivalent to
40% of
the stake held in CBPI to the total value of DPPI, as expressly established
in
the Purchase and Sale Agreement. Additional information on the Offer calculation
price may be found in the Justified Statement of the Purchase Price Calculation
Format
6
Item
1
Exhibit
I - Draft Public Offer Statement
6.2. Valuation
Report. On April 4, 2007, Deutsche Bank Securities Inc. (“Deutsche
Bank”) issued a CBPI valuation report (the “Valuation Report”) within
the terms required by CVM Instruction 361/02, which contains analyses on
CBPI
adopting the following methodologies:
(i)
Book Value per Share. The book value on December
31, 2006, was R$14.68 per Share;
(ii)
Weighted Average Price of the Shares. The weighted average price per
volume of Shares traded on BOVESPA (a) between March 15, 2006 and March 16,
2007
was R$21.72 and (b) between March 19, 2007 (date that the relevant fact was
disclosed) and April 4, 2007 (date of the Valuation Report) was R$52.55;
and
(iii)
Discounted Cash Flow. The discounted cash flow method resulted in a range
of values between R$26.97 and R$29.81 per Share.
6.2.1. Only
the valuations of DPPI, RPI and CBPI had been analysed by the CVM, for the
effect of public offerings to acquire shares as a result of disposal
of control in publicly traded companies as set forth in article 254-A of
Brazilian Corporate Law.
6.3. Shares
held by Deutsche Bank and related entities. Deutsche Bank, its
affiliates and persons related to Deutsche Bank and its affiliates do not
hold
shares issued by CBPI or the Offerer.
6.3.1.
Deutsche Bank hereby declares that there is no conflict of interest which
reduces its independence as required to draw up the Valuation
Report.
6.3.2.
Deutsche Bank will receive US$ 3,000,000.00 net of taxes as remuneration
for
drawing up the Valuation Report.
7. INFORMATION
REGARDING CBPI
7.1. Headquarters
and Business Purpose. CBPI's headquarter is located at Rua
Francisco Eugênio, 329, in the City of Rio de Janeiro, State of Rio de Janeiro,
and its purpose comprises, either on its own behalf or through third parties,
(i) importing, exporting, storing, processing, selling, transporting and
distributing oil products, their derivatives or other related products,
including tires, batteries and car accessories, alongside their respective
equipment, installation, devices and machines generally related to this
business, of either foreign or domestic origin, and is further entitled to
provide related services and any subsidiary activities, and (ii) purchase
shares, units or stakes in other companies.
7
Item
1
Exhibit
I - Draft Public Offer Statement
7.2. Composition
of Shareholdings. On April 23, 2007, the CBPI shareholdings were as
follows:
|
Shareholder
|
Common
Shares
|
%
|
Preferred
Shares
|
%
|
Total
|
%
|
|
Offerer
|
1,344,491
|
3.8
|
402
|
0.0
|
1,344,893
|
1.3
|
|
Persons
Linked to the Offerer
|
31,050,890
|
87.7
|
3,311,992
|
4.7
|
34,362,882
|
32.4
|
|
Management
|
7
|
Less
than 0.1
|
15,000
|
Less
than 0.1
|
15,007
|
Less
than 0.1
|
|
Treasury
Shares
|
0
|
0.0
|
0
|
0.0
|
0
|
0.0
|
|
Free
Float
|
3,013,918
|
8.5
|
67,215,300
|
95.3
|
70,229,218
|
66.3
|
|
Total
|
35,409,306
|
100.0
|
70,542,694
|
100.0
|
105,952,000
|
100.0
|
7.3. CBPI
Selected Financial Indicators. CBPI selected financial indicators are stated
in the following table, based on consolidated financial statements:
|
|
12.31.2005
|
12.31.2006
|
06.30.2007
|
|
Capital
Stock Realized (R$ thousand)
|
580,000
|
1,025,000
|
1,030,000
|
|
Net
Equity (R$ thousand)
|
1,350,342
|
1,555,165
|
1,734,813
|
|
Net
Revenues (R$ thousand)
|
19,476,501
|
22,225,121
|
11,128,134
|
|
Operating
Profits (R$ thousand)
|
411,935
|
369,515
|
230,312
|
|
Net
Profits (R$ thousand)
|
325,477
|
323,549
|
179,648
|
|
Total
Liabilities (R$ thousand)*
|
1,425,962
|
1,467,138
|
1,342,980
|
|
Current
Liabilities (R$ thousand)*
|
960,643
|
788,670
|
679,908
|
|
Long
Term Liabilities (R$ thousand)*
|
465,316
|
678,464
|
663,066
|
|
Number
of Shares excluding Treasury Shares (thousand)
|
52,976
|
105,952
|
105,952
|
|
Earnings
per Share (R$)
|
6.14
|
3.05
|
1.70
|
|
Book
Value per 1,000 shares (R$)
|
25.49
|
14.68
|
16.37
|
|
Total
Liabilities / Net Equity (%)
|
106%
|
94%
|
77%
|
|
Net
Profits / Net Equity (%)
|
24%
|
21%
|
10%
|
|
Net
Profits / Net Revenues (%)
|
2%
|
1%
|
2%
|
|
Net
Profits / Book Capital Stock (%)
|
56%
|
32%
|
17%
|
*
Refers
to the sum of Current Liabilities, Long Term Liabilities and Non-Controlling
Shareholders Stake and does not therefore consider Net Equity.
7.3.1. Annual
and periodic CBPI financial statements are available at www.ipiranga.com.br and
www.cvm.gov.br.
7.4. Historic
Share Trading Information. The following tables indicate the trading
volumes, quantities and average prices involved in spot market trades on
BOVESPA
for the Shares (PTIP3) and the preferred shares (PTIP4) issued by CBPI in
the
last twelve (12) months:
8
Item
1
Exhibit
I - Draft Public Offer Statement
7.4.1. Common
Shares
|
Month
|
Total
Volume Traded (R$)
|
Number
of Common Shares Traded
|
Weighted
Average Price (in R$) of Common Shares
|
|
July
2007
|
1,888,372
|
33,600
|
R$
56.20
|
|
June
2007
|
1,141,548
|
20,600
|
R$
55.41
|
|
May
2007
|
455,781
|
8,300
|
R$
54.91
|
|
April
2007
|
3,245,331
|
61,000
|
R$
53.20
|
|
March
2007
|
8,727,134
|
166,500
|
R$
52.42
|
|
February
2007
|
169,922
|
6,500
|
R$
26.14
|
|
January
2007
|
265,963
|
12,000
|
R$
22.16
|
|
December
2006
|
495,524
|
22,600
|
R$
21.93
|
|
November
2006
|
372,094
|
17,200
|
R$
21.63
|
|
October
2006
|
505,272
|
23,800
|
R$
21.23
|
|
September
2006
|
65,155
|
3,100
|
R$
21.02
|
|
August
2006
|
9,380
|
400
|
R$
23.45
|
7.4.2. Preferred
Shares
|
Month
|
Total
Volume Traded (R$)
|
Number
of Preferred Shares Traded
|
Weighted
Average Price (in R$) of Preferred Shares
|
|
July
2007
|
142,776,756
|
5,558,200
|
R$
25.69
|
|
June
2007
|
128,394,723
|
5,134,800
|
R$
25.00
|
|
May
2007
|
148,013,889
|
5,999,200
|
R$
24.67
|
|
April
2007
|
213,033,523
|
8,446,200
|
R$
25.22
|
|
March
2007
|
234,006,646
|
10,336,500
|
R$
22.64
|
|
February
2007
|
80,134,434
|
3,584,300
|
R$
22.36
|
|
January
2007
|
93,793,202
|
4,895,400
|
R$
19.16
|
|
December
2006
|
80,232,637
|
4,232,700
|
R$
18.96
|
|
November
2006
|
78,220,983
|
4,219,900
|
R$
18.54
|
|
October
2006
|
83,419,080
|
4,466,400
|
R$
18.68
|
|
September
2006
|
83,316,522
|
4,829,800
|
R$
17.25
|
|
August
2006
|
114,717,737
|
6,618,200
|
R$
17.33
|
8. INFORMATION
REGARDING THE OFFERER
8.1. Headquarter
and Business Purpose . The Offerer's headquarter is located at Avenida
Brigadeiro Luiz Antônio, 1343, 9º andar, in the City of São Paulo, State of São
Paulo, and the Offerer's purpose is the investment of equity capital in
commerce, industry, agriculture and service companies, via subscription to
or
purchase of company shares or units.
9
Item
1
Exhibit
I - Draft Public Offer Statement
8.2. Sector
and Activities. Prior to acquiring the South Distribution Assets, Ultrapar
was in the Liquefied Petroleum Gas (“LPG") distribution sector
via Ultragaz Participações Ltda. (“Ultragaz”), in the chemicals
production via Oxiteno S.A. Indústria e Comércio (“Oxiteno”), and in the
integrated logistics solutions for special bulk cargo via Ultracargo Operações
Logísticas e Participações Ltda. (“Ultracargo”). Highlights in its
operating areas: with Ultragaz, it is the leading Brazilian LPG distributor,
with 24% market share (Source: Sindigás); with Oxiteno, it is the largest South
American manufacturer of ethylene oxide and its main derivatives as well
as the
largest producer of chemical specialties in Brazil; and with Ultracargo it
is
one of the biggest logistics solution providers for special bulk cargo in
Brazil.
8.3. Information
on the Offerer’s Controlling Company. Ultrapar is controlled by Ultra S.A.
Participações, which holds 66% of the voting capital and 40% of Ultrapar’s total
capital stock.
9. SUPERVENING
LIABILITY
9.1. Additional
Liability. The Offerer hereby agrees to pay the owners of the Shares
accepting the Offer any additional amount, if any, between: (i) the price
paid
to the shareholders for the sale of their Shares, restated by the TR (based
on
365 days per year) on a pro-rated basis from the Auction Date up to the date
on
which payment of such amounts is due (restated according to the alterations
in
the number of shares resulting from splits, groupings or conversions) and
(ii)
the Share price that would be due, or may be due, in the event of the following
circumstances within a period of one (01) year from the Auction Date, (a)
a fact
that requires or shall require a mandatory public offering to acquire the
Shares
or (b) a corporate event that would entitle Shareholders accepting the Offer
to
withdraw from the company upon payment of a price per share, if they still
were
CBPI shareholders on the date of such a corporate event, and disagreed with
the
deliberation approving the implementation of any corporate event that would
allow said right to be enforced.
9.1.1. CBPI
Share Exchange Offer. According to the relevant notice disclosed on March
19, 2007, the Offerer intends to incorporate CBPI shares once the Offer has
been
concluded. Pursuant to article 252, paragraph 2 of Brazilian Corporate Law,
the
owners of common shares issued by CBPI disagreeing with this share exchange
shall be entitled to withdraw from the company, upon receiving a
price per share that shall be defined within the scope of article 264 of
the
Brazilian Corporate Law. Shareholders accepting this Offer shall be entitled
to
receive the difference, if any, between the Offer Price (restated as set
forth
in item 1.5) and the share price resulting from exercising the right to withdraw
from the company. Thus, the Offerer does not foresee paragraph 1, article
10 of
CVM Instruction 361/02 being applicable, since the price per share resulting
from exercising of the right to withdraw from the company has not yet been
disclosed.
10. ADDITIONAL
INFORMATION
10.1. Updating
the Publicly traded Company Registration. The Offerer hereby declares that
to the best of its knowledge and having requested the appropriate confirmation,
CBPI registration as a publicly traded company has been maintained up to
date
pursuant to article 21 of Law No. 6,385/76;
10
Item
1
Exhibit
I - Draft Public Offer Statement
10.2. Offerer
Representation. The Offerer hereby represents that it is responsible for the
truthfullness, quality and quantity of information submitted to the CVM and
the
market, and for any harm caused to CBPI, its shareholders and third parties,
by
gross negligence or willful misconduct, resulting from false, inaccurate
information or information that has been omitted.
10.3. Intermediary
Institution Representation. The Intermediary Institution hereby represents
that it has taken every precaution and acted diligently to ensure that the
information submitted by the Offerer is true, consistent, accurate and
sufficient, undertaking liability for any omission in its duty, and that
it has
verified the quantity and quality of the information supplied to the market
during the entire Offer procedure, required for shareholders to take decisions,
including occasional and seasonal CBPI information, as well as those contained
herein and in the Valuation Report.
10.4. Duties
of the Financial Advisor. In conjunction with the Intermediary Institution,
the Financial Advisor shall help the Offerer in all phases of the Offer,
including, but not limited to, issues regarding (i) oversight and control
of
Offer development, (ii) responses to any questions eventually raised
by CBPI shareholders and (iii) the receipt and processing of shareholder
accreditation requests from shareholders wishing to take part in the Auction.
Regardless of this Financial Advisor’s duty, the Intermediary Institution shall
not exempt itself from any of its legal and regulatory duties in relation
to the
Offer and its settlement.
10.5. Shares
held by the Intermediary Institution, the Financial Advisor and affiliated
companies. The Intermediary Institution and the Financial Advisor do not
hold or manage shares or other securities issued by CBPI. However, the following
companies which are direct or indirect subsidiaries of Banco Bradesco S.A.,
controlling company of the Intermediary Institution and Financial Advisor,
hold
stakes in CBPI: (i) Banco Alvorada S.A., holding 2,240 preferred shares issued
by CBPI and (ii) Bradesco Vida e Previdência S.A. holding 703,702 common shares
and 900,000 preferred shares issued by CBPI.
10.6. No
Undisclosed Relevant Facts or Circumstances. The Intermediary Institution,
the Financial Advisor for the Offer and the Offerer hereby declare that they
have no knowledge of the existence of any relevant facts or circumstances
not
disclosed to the public which may have a relevant bearing on CBPI income
or CBPI
Share prices on the market.
10.7. Access
to the Valuation Report, the Offer Notice, the Justified Statement of the
Purchase Price Calculation Format and List of Shareholders. The Valuation
Report, this Notice, the Justified Statement of the Purchase Price Calculation
Format and the List of CBPI Shareholders are available to all interested
parties
(the last document issued only upon identification of the recipient and issuance
of a receipt signed by the recipient) at the addresses listed below.
The Valuation Report, this Notice and the Justified Statement of the Purchase
Price Calculation Format may also be found at the following Internet
pages:
COMPANHIA
BRASILEIRA DE PETRÓLEO IPIRANGA
Rua
Francisco Eugênio, 329, City of Rio de Janeiro, State of Rio de
Janeiro
www.ipiranga.com.br
11
Item
1
Exhibit
I - Draft Public Offer Statement
ULTRAPAR
PARTICIPAÇÕES S.A.
Avenida
Brigadeiro Luiz Antônio, 1343, 9º andar – City of São Paulo, State of São
Paulo
www.ultra.com.br
INTERMEDIARY
INSTITUTION
BRADESCO
S.A. CORRETORA DE TÍTULOS E VALORES MOBILIÁRIOS
Avenida
Paulista, 1450, 7º andar, City of São Paulo, State of São Paulo
www.shopinvest.com.br
OFFER
FINANCIAL ADVISOR
BANCO
BRADESCO BBI S.A.
Avenida
Paulista, 1450, 8º andar, City of São Paulo, State of São Paulo
www.shopinvest.com.br/ofertaspublicas
BRAZILIAN
SECURITIES AND EXCHANGE COMMISSION
Rua
Cincinato Braga, 340, 2º andar, Centro – City of São Paulo, State of São
Paulo
Rua
Sete
de Setembro, 111, 2º andar, “Centro de Consultas” – Rio de Janeiro, Rio de
Janeiro
www.cvm.gov.br
SAO
PAULO STOCK EXCHANGE - BOVESPA
Rua
XV de
Novembro, 275 – City of São Paulo, State of São Paulo
www.bovespa.com.br
10.8. CVM
registration. The offer was filed with the CVM in advance for analysis and
was registered on October 5, 2007 with number CVM/SRE/OPA/ALI/2007/006. On
July
10, 2007, BOVESPA authorized the Auction to be held on its trading
system.
GRANTING
OF THE REQUEST TO REGISTER THIS OFFER DOES NOT IMPLY THAT CVM GUARANTEES
THE
TRUTHFULLNESS OF THE INFORMATION PROVIDED NOR DOES IT REPRESENTS A JUDGMENT
REGARDING THE QUALITY OF THE COMPANY ISSUING THE OFFER OR THE PRICE OFFERED
FOR
THE SHARES INVOLVED.
ANBID
This
public offer/program was prepared in accordance with the Brazilian Association
of Investment Banks – ANBID Self-Regulation Code for Public Offerings of
Securities Distribution and Acquisition registered with the 4th Registry
of Deeds
and Documents of the Judicial District of São Paulo, State of São Paulo under
No. 4890254. This public offer/program therefore complies with the minimum
standards of information contained in the code and ANBID is in no way liable
for
the information provided, the quality of the issuer and/or offerer,
participating institutions and the securities that are the involved in the
public offer/program”.
12
Item
2
This
notice is neither an offer to purchase nor a solicitation of an offer to
sell
common shares of Companhia Brasileira de Petróleo Ipiranga.The Offer
(as defined below) is made solely by the Public Offer Notice (as defined
below)
being published in Brazil on October 9, 2007. The Offer is not being extended
to, nor will tenders be accepted from or on behalf of, holders of shares
of
capital stock of any company in any jurisdiction in which the extending or
acceptance of the Offer would not be in compliance with the laws of that
jurisdiction. In any jurisdictions where the laws require that the Offer
be made
by a licensed broker or dealer, the Offer shall be deemed to be made on behalf
of the Company by Bradesco S.A. Corretora de Títulos e Valores Mobiliários, the
Dealer Manager for the Offer, or one or more registered brokers or dealers
licensed under the laws of that jurisdiction.
Notice
of
Offer to Purchase for Cash All Outstanding
Shares
of
Common Stock
of
COMPANHIA
BRASILEIRA DE PETRÓLEO IPIRANGA
by
ULTRAPAR
PARTICIPAÇÕES S.A.
Ultrapar
Participações S.A. (“Ultrapar”), a publicly traded company organized under the
laws of the Federative Republic of Brazil, is offering to purchase for cash
(the
“Offer”) all of the outstanding shares of common stock (the “Shares”) of
Companhia Brasileira de Petróleo Ipiranga (“CBPI”), a publicly traded company
organized under the laws of the Federative Republic of Brazil, at the price
of
R$64.43 per share (the “Offer Price”), under the terms and subject to the
conditions set forth in the Public Offer Notice for the Acquisition of Common
Shares issued by CBPI for and on behalf of Ultrapar Participações S.A. that is
being published in Brazil on October 9, 2007 (with any amendments or
supplements thereto, the “Public Offer Notice”).
The
Offer
is open to all holders of common shares of CBPI and will remain open for
a
period of 30 days from October 9, 2007. The Offer will be conducted
via auction (the “Auction”) on November 8, 2007 (the “Auction Date”), at
1:00P.M. (São Paulo local time), via MEGABOLSA, the trading system of
the São Paulo Stock Exchange (the “BOVESPA”). The Offer period shall
not be extended beyond the Auction Date. The Auction is not subject
to any requirement for minimum acceptance levels and Ultrapar must purchase
all
Shares offered during the Auction. Holders of validly tendered Shares
will receive their respective Offer Price in cash, in reais, on the
financial settlement date for the Auction, which shall be three business
days
following the Auction Date, expected to be November 13, 2007.
|
THE
OFFER WILL EXPIRE AT 12:00A.M., NEW YORK CITY TIME (1:00P.M.
SÃO PAULO LOCAL TIME) ON NOVEMBER 8, 2007, FOR SHAREHOLDERS OF
CBPI.
|
By
12:00
P.M. (São Paulo local time) on the Auction Date, the brokers and representatives
of the shareholders that wish to sell Shares in the Offer must register the
Shares they hold, which will be sold during the Auction on the MEGABOLSA
under
the ticker symbols “PTIP3L”. Offer, acceptance and the subsequent
firm offer to sell the Shares will be irrevocable and irreversible as of
the
commencement of the Auction, to the extent that an offer and acceptance creates
an obligation on the part of the shareholder to dispose of his or her Shares
and
provided that acceptance was duly and validly given in accordance with the
Public Offer Notice.
Any
third
party is entitled to make a competing offer to acquire all or part of the
Shares, subject however, to the following: (i) competing offers must be
registered with the Comissão de Valores Mobiliários (the “CVM”), pursuant to CVM
instruction 361/02 and (ii) the value of the first competing offer must be
at
least 5% greater than the last price offered by Ultrapar. All
brokerage costs and commissions relating to the disposal of the Shares shall
be
borne by the respective selling shareholder. All brokerage costs and commissions
relating to the purchase of the Shares shall be borne by
Ultrapar. Bradesco S.A. Corretora de Títulos e Valores Mobiliários
(the “Dealer Manager”) will be Ultrapar’s representative during the
Auction.
CBPI
shareholders that wish to take part in the Auction must register with the
Dealer
Manager or any other brokerage company authorized to trade on the BOVESPA
(each
individually referred to as a “Broker” and, collectively, as the “Brokers”)
between the date that the Public Offer Notice are published and 5:00 P.M.
on
November 7, 2007, the business day immediately preceding the Auction Date
(the
“Registration Period”). Participation in the Auction must comply with the
requirements established by the BOVESPA and Companhia Brasileira de Liquidação e
Custódia (the “CBLC”), the securities clearing house for the BOVESPA, as well as
with the requirements set forth in the Public Offer Notice. To
register with a Broker, shareholders must present the Broker with certified
copies of the identifying documents set forth in the Public Offer
Notice.
In
the
event that CBPI shareholders accept the Offer but are within one year subjected
to a mandatory public offering for their Shares, or to a corporate event
from
which they validly dissent, Ultrapar has agreed in the Public Offer Notice
to
pay such holders an additional amount equal to the difference of the price
paid
to such holders in the Offer (inflation adjusted from the Auction Date to
the
date of the additional payment) and the share price to be paid in respect
of
such offering or event. In addition, as part of Ultrapar’s subsequent
acquisition of the remaining CBPI Shares and all of its outstanding preferred
shares
Item
2
following
the completion of the Offer, Brazilian Corporate Law will entitle holders
of
CBPI’s Shares to withdraw from their shareholdings in connection with such
transaction. Holders of Shares are entitled to receive the difference, if
any,
between the Offer Price (adjusted as above) and the share price resulting
from
exercising such withdrawal right.
Pursuant
to the terms of the Dealer Manager Agreement executed by the Dealer Manager
and
Ultrapar and to CVM Instruction 361/02, the Dealer Manager will guarantee
financial settlement of the Offer.
The
Offer
is being conducted as part of a multi-stage acquisition and restructuring
(the
“Transaction”) of the Ipiranga Group, a large Brazilian fuel distributor,
petrochemicals producer and oil refinery, of which CBPI, Refinaria de Petróleo
Ipiranga S.A. (“RIPI”) and Distribuidora de Produtos de Petróleo Ipiranga S.A.
(“DPPI”) form the substantial part, by Ultrapar, Petróleo Brasileiro S.A.
(“Petrobras”) and Braskem S.A. (“Braskem”). Pursuant to several
Transaction agreements, the Ipiranga Group’s businesses will be split up and
managed by Petrobras, Braskem and Ultrapar. The Transaction consists
of five stages: (i) Ultrapar’s acquisition of shares of RIPI, DPPI and CBPI from
controlling shareholders of the Ipiranga Group; (ii) mandatory tender offers,
of
which the Offer is part, for the common shares of RIPI, DPPI, CBPI and IPQ;
(iii) a public offering to delist Copesul’s shares from the BOVESPA; (iv)
exchange offers of Ultrapar’s preferred shares for the remaining outstanding
common and preferred shares of RIPI, DPPI and CBPI; and (v) the split-up
of the
Ipiranga Group’s Assets among Ultrapar, Braskem and Petrobras.
On
April
4, 2007, in accordance with CVM Instruction 361/02, Deutsche Bank Securities
Inc. (“Deutsche Bank”) issued a valuation report (the “Valuation Report”), with
respect to RIPI, DPPI, CBPI and Ultrapar. The Valuation Report
contains analyses of book equity values per share as of December 31, 2006
for
CBPI of R$14.68; weighted average prices per share for CBPI of (i) R$21.72,
for
the period from March 15, 2006 to March 16, 2007 and (ii) R$52.55, for the
period from March 19, 2007 (the date that the Transaction was first publicly
announced) to April 4, 2007 (the date of the Valuation Report) for CBPI;
and,
under the discounted cash flow method, price per share ranges of R$26.97
to
R$29.81. Deutsche Bank and its affiliates do not hold shares issued
by CBPI or Ultrapar. Deutsche Bank disclaims any conflict of interest
that would decrease its independence as required to impartially produce the
Valuation Report. The Valuation Report was revised to incorporate
changes requested by the CVM, which are described in the following documents:
(i) OFICIO/CVM/SRE/GER-1/Nº 1017/2007, (ii) OFICIO/CVM/SRE/GER-1/Nº 1018/2007,
(iii) OFICIO/CVM/SRE/GER-1/Nº 1019/2007, (iv) OFICIO/CVM/SRE/GER-1/Nº 1427/2007,
(v) OFICIO/CVM/SRE/GER-1/Nº 1428/2007, (vi) OFICIO/CVM/SRE/GER-1/Nº
1429/2007 and (vii) OFICIO/CVM/SRE/GER-1/Nº 1703/2007. For the
purposes of the Offer, the CVM has indicated that its review was limited
to an
analysis of the valuations of RIPI, DPPI and CBPI presented in the Valuation
Report pursuant to article 254-A of Brazilian Corporate Law. Deutsche
Bank will receive US$3,000,000.00 net of taxes for delivering the Valuation
Report.
On
July
10, 2007, the BOVESPA approved the terms of the Offer. The Offer was
previously filed with the CVM for its review and approval and on October
5, 2007
was registered under the number, CVM/SRE/OPA/ALI/2007/006.
In
conjunction with the Dealer Manager, Banco Bradesco BBI S.A. (the “Financial
Advisor”) will help Ultrapar through all phases of the Offer to (i) oversee and
control the progress of the Offer, (ii) respond to any questions raised by
CBPI
shareholders and (iii) receive and process certification requests from
shareholders that wish to participate in the Auction.
Annual
and
periodic financial statements and operating information regarding CBPI and
Ultrapar are available at each company’s respective website, listed below, as
well as at www.cvm.gov.br, and, in
the case of Ultrapar, at www.sec.gov. Additional
information regarding the Transaction, such as the Transaction agreements,
the
Valuation Report and the Public Offer Notice, are available at www.ultra.com.br, www.cvm.gov.br
and www.sec.gov.
The
Public Offer Notice contains important information and should be read in
its
entirety before making any decision with respect to the
Offer.
Questions
or requests for assistance or copies of the Public Offer Notice may be directed
to Ultrapar at its address and telephone number below. Holders of
CBPI common shares may also contact their brokers, dealers, commercial banks,
trust companies or other nominees for assistance concerning the
Offer.
COMPANHIA
BRASILEIRA DE PETRÓLEO
IPIRANGA
Rua
Francisco Eugênio, 329 – Rio de Janeiro, Rio de Janeiro
www.ipiranga.com.br
ULTRAPAR
PARTICIPAÇÕES S.A.
Avenida
Brigadeiro Luiz Antônio, 1343, 9º andar - São Paulo, São Paulo
Telephone: 55-11-3177-7014
www.ultra.com.br
Item
2
The
Dealer Manager for the Offer is:
BRADESCO
S.A. CORRETORA DE TÍTULOS E VALORES MOBILIÁRIOS
Avenida
Paulista, 1450, 7º andar - São Paulo, São Paulo
www.shopinvest.com.br
The
Financial Advisor for the Offer is:
BANCO
BRADESCO BBI S.A.
Avenida
Paulista, 1450, 8º andar - São Paulo, São Paulo
www.shopinvest.com.br
October
9,
2007
Item
3
|
Strictly
private and confidential
|
|
Valuation
Report to Ultrapar Participações
Ultrapar
Participações S.A., Refinaria Petroleo Ipiranga S.A., Distribuidora de Produtos
de Petroleo Ipiranga S.A., Companhia Brasileira de Petroleo
Ipiranga
April
4, 2007
|
A
Passion to Perform.
|
|
 |
|
|
|
Disclaimer
|
n
|
These
materials may only be used by Ultrapar Participações S.A. (“Ultrapar”) for
the purposes defined in the engagement letter signed with Deutsche
Bank
Securities Inc. (“Deutsche Bank”). Neither Deutsche Bank nor any of its
affiliates or any of its or their officers, directors, employees,
affiliates, advisors, agents or representatives (collectively,
“Deutsche
Bank Representatives”) makes any express or implied representation or
warranty as to the accuracy or completeness of any of the materials
set
forth herein or provides advice relating to tax, accounting, legal,
antitrust, or other regulatory matters. Nothing contained in the
accompanying materials is, or shall be relied upon as, a promise
or
representation as to the past or the
future
|
|
n
|
In
connection with Deutsche Bank’s role of “conducting a valuation analysis /
preparing a valuation report” for Ultrapar, and in preparing its report as
to the respective valuations of Companhia Brasileira de Petróleo Ipiranga
(“CBPI”), Distribuidora de Produtos de Petróleo Ipiranga S.A. (“DPPI”) and
Refinaria de Petróleo Ipiranga S.A. (“RIPI”) (collectively, “Ipiranga”, or
the “Ipiranga Group”) and Ultrapar, Deutsche Bank has reviewed certain
publicly available financial and other information concerning Ultrapar
and
the Ipiranga Group and certain internal analyses and other information
furnished to it by Ultrapar and the Ipiranga Group. Deutsche Bank
has also
held discussions with members of the senior managements of Ultrapar
and
the Ipiranga Group, and with respect to certain assets, the senior
management of Braskem, regarding the businesses and prospects of
their
respective companies and the operations of the combined company
following
the transactions described herein. In addition, Deutsche Bank has
(i)
reviewed the reported prices and trading activity for Ultrapar’s and the
Ipiranga Group’s stock, (ii) compared certain financial and stock market
information for Ultrapar and the Ipiranga Group with similar information
for certain other companies whose securities are publicly traded,
(iii)
reviewed the financial terms of certain recent business combinations
which
it deemed comparable in whole or in part, (iv) reviewed the terms
of the
agreements governing the transaction, and (v) performed such other
studies
and analyses and considered such other factors as it deemed
appropriate
|
|
i
|
|
|
Disclaimer
(continued)
|
n
|
Deutsche
Bank has not assumed responsibility for independent verification
of, and
has not independently verified, any information, whether publicly
available or furnished to it, concerning Ultrapar or the Ipiranga
Group,
including, without limitation, any financial information, forecasts
or
projections considered in connection with the preparation of its
report as
to the respective valuations of Ultrapar and the Ipiranga Group.
Accordingly, for purposes of its report, Deutsche Bank has assumed
and
relied upon the accuracy and completeness of all such information
and
Deutsche Bank has not conducted a physical inspection of any of
the
properties or assets, and has not prepared or obtained any independent
evaluation or appraisal of any of the assets or liabilities, of
Ultrapar
or the Ipiranga Group. However,
Deutsche Bank considers consistent the information used in this
Report
|
|
n
|
It
should be understood that any valuations, financial and other forecasts
and/or estimates or projections and other assumptions contained
in the
accompanying materials (including, without limitation, regarding
financial
and operating performance), were prepared or derived from information
(whether oral or in writing) supplied solely by the respective
managements
of Ultrapar, the Ipiranga Group and Braskem or derived from other
public
sources, without any independent verification by Deutsche Bank,
and
involve numerous and significant subjective determinations and
assumptions
by Ultrapar and the Ipiranga Group, which may not be correct. As
a result,
it is expected that there will be a difference between actual and
estimated or projected results, and actual results may vary materially
from those shown herein. In addition, with respect to any such
information
made available to Deutsche Bank and used in its analyses, Deutsche
Bank
has assumed that they have been reasonably prepared on bases reflecting
the best currently available estimates and judgments of the respective
managements of Ultrapar and the Ipiranga Group as to the matters
covered
thereby. The Report observes the requirements imposed by Brazilian
Securities Regulation, in particular Rule #361/02 of the Brazilian
Securities Commission ("CVM")
|
|
n
|
Accordingly,
in preparing its report as to the respective valuations
of Ultrapar and
the Ipiranga Group, neither Deutsche Bank nor any of the
Deutsche Bank
Representatives make any express or implied representation
or warranty, or
express any view, as to the accuracy, reasonableness, completeness
or
achievability of any such financial and other forecasts
and/or estimates
or projections, or as to the determinations or assumptions
on which they
are based. Deutsche Bank’s report is necessarily based upon
economic, market and other conditions as in effect on,
and the information
made available to it as of, the date
hereof
|
|
ii
|
|
|
Disclaimer
(continued)
|
n
|
Deutsche
Bank has also assumed that all material governmental, regulatory
or other
approvals and consents required in connection with the consummation
of the
transaction will be obtained and that in connection with obtaining
any
necessary governmental, regulatory or other approvals and consents,
or any
amendments, modifications or waivers to any agreements, instruments
or
orders to which either Ultrapar or the Ipiranga Group is a party
or is
subject or by which it is bound, no limitations, restrictions or
conditions will be imposed or amendments, modifications or waivers
made
that would have a material adverse effect on Ultrapar or the Ipiranga
Group or materially reduce the contemplated benefits of the transaction
to
Ultrapar
|
|
n
|
This
Report was based on the information available until today, and
the views
expressed are subject to change based upon a number of factors,
including
market conditions and Ultrapar’s and the Ipiranga Group’s business and
prospects. Deutsche Bank does not undertake any obligation to update
or
otherwise revise these materials after the date
hereof
|
|
n
|
This
Report and its conclusions are not recommendations by Deutsche
Bank as to
whether Ipiranga shareholders should tender their shares in the
mandatory
tender offer, or to Ultrapar or Ipiranga shareholders as to the
fairness
to such shareholders, from a financial point of view, of the exchange
ratio in the incorporation of RIPI, CBPI, DPPI shares in Ultrapar.
Each
shareholder must reach its own conclusions about the advisability
of
accepting the offer presented by Ultrapar and the incorporation
of the
shares of CBPI, DBPI and RIPI by
Ultrapar
|
|
n
|
This
valuation report incorporates the changes requested by the
Brazilian
Securities Exchange Commission (Comissão de Valores Mobiliários – CVM)
detailed in the following documents: (i) OFICIO/CVM/SRE/GER-1/Nº
1017/2007, (ii) OFICIO/CVM/SRE/GER-1/Nº 1018/2007, (iii)
OFICIO/CVM/SRE/GER-1/Nº 1019/2007, (iv) OFICIO/CVM/SRE/GER-1/Nº 1427/2007,
(v) OFICIO/CVM/SRE/GER-1/Nº 1428/2007, (vi) OFICIO/CVM/SRE/GER-1/Nº
1429/2007 and (vii) OFICIO/CVM/SRE/GER-1/Nº 1703/2007. This revised book
does not present a different assessment of value than the
one presented by
Deutsche Bank on the Valuation Report dated July 4th,
2007
|
|
iii
|
|
|
|
Section
|
|||
|
1
|
Executive
summary
|
1
|
|
|
2
|
Valuation
summary
|
9
|
|
|
A
|
Ultrapar
|
10
|
|
|
B
|
RIPI
|
13
|
|
|
C
|
DPPI
|
16
|
|
|
D
|
CBPI
|
19
|
|
|
3
|
Economic
value of assets
|
22
|
|
|
A
|
Ultrapar
|
26
|
|
|
B
|
Ultrapar
prior to the share merger
|
37
|
|
|
C
|
Fuel
distribution – CBPI
|
39
|
|
|
D
|
Fuel
distribution – DPPI
|
45
|
|
|
E
|
Copesul
|
50
|
|
|
F
|
IPQ
|
55
|
|
|
G
|
Valuation
of other assets based on multiples
|
60
|
|
|
4
|
Final
considerations
|
62
|
|
|
5
|
Glossary
|
64
|
|
|
Appendix
|
|||
|
I
|
Share
price evolution
|
68
|
|
|
II
|
Comparable
multiples
|
74
|
|
| III |
Overview
of the industries in which the assessed companies operate
|
78
|
|
| IV |
Calculation
backup
|
82
|
|
| V |
Other
relevant information
|
91
|
|
|
|
Executive
summary
|
Section
1
|
Section
1
Executive
summary
|
1
|
|
Executive
summary
|
Section
1
|
|
Initial
considerations
|
|
n
|
This
appraisal report (“Report” or “Valuation Report”) was prepared by Deutsche
Bank as requested by Ultrapar
|
|
n
|
The
Report observes the requirements imposed by Brazilian Securities
Regulation, in particular Rule #361/02 of the Brazilian Securities
Commission (“CVM”). Ultrapar requested this Report to be used in
connection with (i) the mandatory tender offers related to the
acquisition
by Ultrapar of the control of Ipiranga Group, and (ii) the incorporation
of CBPI, DPPI and RIPI shares in
Ultrapar
|
|
n
|
The
ranges for the respective valuations of Ultrapar, CBPI, DPPI and
RIPI are
limited to 10% due to a requirement imposed by Rule #361/02 of
the
CVM
|
|
2
|
|
Executive
summary
|
Section
1
|
Scope
of Deutsche Bank’s analysis
The
objective of this Valuation Report is to present economic valuations of both
Ultrapar and Ipiranga Group in accordance with the criteria defined as mandatory
by the CVM
Under
the
CVM Rule #361/02, Deutsche Bank has conducted an analysis using the following
methodologies and assumptions:
|
n
|
Economic
value based on discounted cash flow (“DCF”) analysis for the main
operating companies and comparable multiples for some smaller operating
subsidiaries
|
|
–
|
Based
on publicly available information and discussions with management
of
Ultrapar and Ipiranga
|
|
n
|
Market
value based on average share prices weighted by traded
volume
|
|
–
|
Average
share price weighted by traded volume during the last twelve months
ended
March 16, 2007 (last trading day
pre-announcement)
|
|
n
|
Book
value of the shares
|
|
–
|
Based
on Ultrapar and Ipiranga’s audited financial statements as of December
31,2006
|
Among
the
different valuation methodologies presented in this Valuation Report, Deutsche
Bank believes that economic value based on DCF and comparable multiples is
the
most applicable methodology for valuing Ultrapar and Ipiranga
|
Economic
value - methodologies for different business
lines
|
||||||||
|
Discounted
cash flow
|
Codename
|
WACC
|
Public
company comparables
|
Codename
|
||||
|
Companhia
Brasileira de Petróleo Ipiranga
|
CBPI
|
12.2%
|
Ipiranga
Química S.A.
|
IQ
|
||||
|
Distribuidora
de Prod. de Petróleo Ipiranga
|
DPPI
|
12.3%
|
Empresa
Carioca de Prod. Químicos S.A.
|
EMCA
|
||||
|
Copesul
Central Química
|
Copesul
|
11.2%
|
Ipiranga
Asfaltos
|
IASA
|
||||
|
Ipiranga
Petroquímica S.A.
|
IPQ
|
11.8%
|
AM/PM
Comestíveis
|
AM/PM
|
||||
|
Ultrapar
Participações
|
Ultrapar
|
10.6%
|
Isa-Sul
Administração e Part. Ltda
|
Isa-sul
|
||||
| Refinaria Petróleo Ipiranga S.A. | Refinery | |||||||
|
3
|
|
Executive
summary
|
Section
1
|
|
Valuation
range -
price
per
share
|
(a) Based on discounted cash flow analysis (DCF) and comparable multiples (b) Market value based on weighted average shares for the 12 months prior to date of announcement (c) Book value based on latest public company filing dated 12/31/2006 |
|
4
|
|
Executive
summary
|
Section
1
|
Conducting
the economic valuation
The
three
main economic
valuation methodologies
used were:
Discounted Cash
Flow
(“DCF”), comparable
public companies’
multiples and
comparable precedent
transaction multiples
|
Discounted
Cash Flow
-
DCF Analysis
|
Comparable
Public
Company
Analysis
|
Comparable
Precedent
Transaction
Analysis
|
||||
|
Methodology
|
|
|
|
|
|
|
|
Potential
advantages
|
|
|
|
|
|
|
|
Potential
disadvantages
|
|
|
|
|
|
|
|
Considerations
|
|
|
|
|
|
|
| Notes: (1) TEV - Total Enterprise Value = Equity plus Net debt. | ||||||
|
5
|
|
Executive
summary
|
Section
1
|
|
Deutsche
Bank credentials
|
|
n
|
Headquartered
in Frankfurt am Main, Germany, Deutsche Bank is the largest bank
in
Germany, and one of the largest financial institutions in Europe
and the
world, as measured by total assets of € 1,126 billion as of December 31,
2006. As of that date, Deutsche Bank employed 68,849 people on
a full-time
equivalent basis, operating in 73 countries out of 1,717 facilities
worldwide, of which 54 % were in Germany. Deutsche Bank offers
a wide
variety of investment, financial and related products and services
to
private individuals, corporate entities and institutional clients
around
the world (source: Deutsche Bank’s 2006 annual
report)
|
|
n
|
Deutsche
Bank and its affiliates’ expertise in assessing Brazilian publicly listed
companies includes: the advisory to Ashmore Energy International
on the
acquisition of Prisma Energy International in 2006, and the fairness
opinion valuation of Companhia Siderúrgica Belgo Mineira in
2005
|
|
n
|
In
addition to that, Deutsche Bank was responsible for the valuation
report
of Cia. Metalic Nordeste for Companhia Siderúrgica Nacional (“CSN”) in
2002
|
|
n
|
Deutsche
Bank or its affiliates also advised La Seda de Barcelona S.A. (“LSB”) on
the acquisition of Eastman Chemical Iberica S.A. from Eastman Chemical
Company in 2007, advised Linde AG on the sale of equipment business
of BOC
Edwards to CCMP Capital in 2007, advised Gazprom on the sale of
a 10.7%
stake to Rosneftegaz, advised ConocoPhillips on the divestment
of selected
European downstream assets (pending), advised Giant Industries
on its sale
to Western Refining Inc. and provided a fairness opinion valuation
(pending), and is advising Valero on strategic alternatives for
the Lima,
Ohio refinery, among other
assignments
|
|
n
|
Other
selected transactions that involved valuation of public companies
include:
the advisory to Fairchild Semiconductor International in its acquisition
of System General Corp, and the advisory to Healthcare REIT in
its
acquisition of Windrose Medical Properties Trust. Deutsche Bank
also acted
as advisor to International DisplayWorks Inc. when it was acquired
by
Flextronics International Ltd. and to US LEC Corp when it merged
with
Paetec Communications, Inc. All these transactions required a fairness
opinion valuation
|
|
n
|
Deutsche
Bank and its affiliates have a qualified team of professionals
based in
New York and São Paulo led by Mr. Ian Reid who was responsible for
producing this Report
|
|
n
|
In
delivering the Report, Deutsche Bank followed its internal policies
applicable to the delivery of valuation reports, including forming
an
internal valuation committee to review and approve the
report
|
|
–
|
The
valuation committee is comprised of at least 3 senior bankers
from the
M&A department that had met at least twice as it is usual on the
2nd
and 4th of April
|
|
6
|
|
Executive
summary
|
Section
1
|
|
Additional
considerations
|
|
n
|
The
date of this Report is April 4,
2007
|
|
n
|
This
Report may be solely used in the context of the request made by
Ultrapar
to Deutsche Bank
|
|
n
|
Research
reports prepared by different areas of Deutsche Bank may utilize
different
assumptions with respect to the future performance of Ultrapar
and
Ipiranga than those used in the Valuation Report, and thus potentially
present significantly different conclusions with respect to valuation.
Those
different areas at Deutsche Bank are independent to the Corporate
Finance
and Mergers and Acquisitions department that was responsible for
the
elaboration of this Report. Those different areas have their own
sources
of information and a different assessment about what they make
available
to the public in the form of publications, and there is no communication
between the professionals involved in the elaboration of this report
and
the professionals of those different areas. Deutsche Bank has strict
internal policies regarding the segregation of public and private
areas at
the bank and monitoring the information flow between them in order
to
guarantee that both areas operate
independently
|
|
n
|
In
compliance with the resolution CVM #361/02, Deutsche Bank states
that as
of April 4, 2007:
|
|
–
|
There
is no commercial or credit relationship that could impact this
Report
|
|
–
|
There
is no conflict of interest that compromises the independence
necessary to
prepare this Report
|
|
–
|
Deutsche
Bank and its affiliates held 8,527 non-voting shares of Braskem
and
171,000 ADRs of Braskem; 62,175 voting shares of Petrobras, and
500,540
ADRs of Petrobras; Deutsche Bank and its affiliates did not hold,
directly
or indirectly, any shares of CBPI, DBPI and RIPI, nor did they
hold shares
or ADRs of Ultrapar, Petrobras or Braskem other than the shares/ADRs
mentioned above
|
|
–
|
Deutsche
Bank is engaged in sales and trading transactions with Petrobras
and
Braskem, which includes, but is not limited to,
derivatives
|
|
–
|
In
May 2006, Deutsche Bank received R$2,673,760.50 net of taxes from
Petrobras for the advisory and structuring services rendered in
connection
with the acquisition of ABB's stake in Termobahia. Deutsche Bank
did not
receive any other fees from Ultrapar, Braskem or Petrobras in connection
with financial advisory, consulting or auditing services, or any
other
investment banking services over the past 12
months
|
|
–
|
Deutsche
Bank will receive US$3,000,000 net of taxes as a fee for the delivery
of
this Report
|
|
Ian
Reid - Managing Director
|
|
7
|
|
Executive
summary
|
Section
1
|
|
Additional
considerations (continued)
|
|
Ian
Reid – Managing Director
|
|
n
|
Ian
Reid, Managing Director for Corporate Finance and Mergers
and Acquisitions
for Latin America, was responsible for the preparation
of this Valuation
Report. Projects relevant in which Mr. Reid has been
involved include the
merger of Brahma and Antarctica to create Ambev, the
unwinding of CSN’s
controlling interest in CVRD (advisor to CVRD), acquisition
of Bolivian
refinery by Petrobras (advisor to Petrobras), the sale
of Latasa by
Bradesco, Alcoa, and JPMorgan to Rexam (advisor to the
sellers), the
acquisition of Panamco by Coca Cola FEMSA (advisor to
Coca Cola FEMSA),
the repurchase by FEMSA of Interbrew’s stake in Femsa Cerveza (advisor to
FEMSA)
|
|
Jose
Securato – Vice President
|
|
n
|
Jose
Securato, Vice President for Corporate Finance and Mergers
and
Acquisitions for Latin America, also participated in the
preparation of
this Valuation Report. His experience includes, among others,
advisory to
Ashmore Energy International in its acquisition of Prisma
Energy
International in 2006 (which included valuation of Elektro),
the valuation
of Cia. Metalic Nordeste for Companhia Siderúrgica Nacional (“CSN”) in
2002, the sale of 40% of Indura in Chile in 2007, the sale
of AGF Chile in
2004, the sale of Ática & Scipione in 2004, the acquisition of TCO/NBT
in 2003 and Valuation Reports for the following companies
or their
businesses: Banco Itaú Argentina, Itausaga Corr. Seguros, Itaupromotora de
Vendas, Intrag DTVM, BFB, FIBEMGE, BANERJ, CENF, LAJEADO,
ROSAL, and
MARTINÓPOLIS between 1998 and 1999
|
Also
participating in the preparation of this Valuation Report:
|
Steve
Guberer – Associate
|
|
n
|
Steve
Guberer, Associate for Corporate Finance and Mergers and
Acquisitions for
Latin America, joined Deutsche Bank one year ago. His experience
includes
advisory for Fortress Investment Group and Centerbridge Partners
in their
US$8.9 billion buyout of Penn National Gaming Inc., announced
in June
2007. Steve worked at Deloitte & Touche from 2000 until 2004. Steve
received his MBA from the University of Chicago and his bachelor’s degree
in accounting from Rutgers
University
|
|
Hunter
Kushner – Analyst
|
|
n
|
Hunter
Kushner, Analyst for Corporate Finance and Mergers and Acquisitions
for
Latin America, joined Deutsche Bank in June 2006. Hunter
has worked on the
IPO of Klabin Segall in addition to other projects. Hunter
has worked in
the Investment Management Division at JPMorgan and at Moore
Capital
Management. He received his Bachelor of Arts in Political
Science from
Yale University
|
|
Guilherme
Gama – Analyst
|
|
n
|
Guilherme
Gama, Analyst for Corporate Finance and Mergers and Acquisitions
for Latin
America, joined Deutsche Bank in 2005. His experience includes
the initial
public offering of Klabin Segall, the public offering of
2008 Notes by
Sabesp, and the bond issuance of 10-year notes of US$140
million in value
as well as the additional perpetual offering by Globo Comunicações. Prior
to this, Guilherme was Financial Director and Junior Business
Administrator for the Fundação Getulio Vargas, São Paulo, and in the
period between 1999 and 2002, he was responsible for operations
and
technical and logistical assistance for Gran Coffee Com.
Loc. Serv., a
business in the sector of coffee serving
systems
|
|
n
|
Other
areas of the bank including the team for Mergers and Acquisitions,
the
group entitled Energy, Utilities, and Chemicals, and the
group entitled
Oil & Gas also contributed to this
report
|
|
8
|
|
Valuation
summary
|
Section
2
|
Section
2
Valuation
summary
|
9
|
|
Valuation
summary
|
Section
2
|
Tab
A
Ultrapar
|
10
|
| Valuation summary |
Section
2
|
Source:
Public
Ultrapar information
Company
description
Ultrapar
is a holding company for 3 separate operating companies: Oxiteno, Ultragaz,
and
Ultracargo
Major
subsidiaries
|
■
|
|
Ultragaz
Participações
LTDA
|
|
|
-
|
Ultragaz
is the leading
distributor of liquefied petroleum gas (LPG) in Brazil, and one
of the
largest distributors in the world by
volume
|
|
|
-
|
Distributes
bottled and bulk LPG
to residential, commercial, and industrial clients in
Brazil
|
|
|
-
|
2006
revenue of US$1.4 billion,
and volume sold of 1.5 million
tons
|
|
■
|
|
Oxiteno
S.A.
|
|
|
-
|
A
second-generation producer of
commodity & specialty
petrochemicals
|
|
|
-
|
Oxiteno
is the largest producer of
ethylene oxide and its main derivatives in Latin
America
|
|
|
-
|
2006
revenue of US$707 million,
and volume sold of 544,000
tons
|
|
■
|
|
Ultracargo
Oper.
Logísticas e Participações
LTDA
|
|
|
-
|
Provides
integrated logistics
services for special
products
|
|
|
-
|
2006
revenue of $103
million
|
|
|
-
|
Storage
capacity at 2006 year end
of 240 thousand cubic
meters.
|
|
|
-
|
Traveled
in 2006 approximately 43
million kilometers
|
Source:
Public Ultrapar information
|
11
|
| Valuation summary |
Section
2
|
Prior
to the share merger,
Ultrapar’s share value
ranges from R$64.48
to R$71.26 based
on the economic value
|
Economic
value (R$)
|
||||||||||||
|
Ultrapar
TEV (before steps 1 and 2)
|
5,879
|
|||||||||||
|
(+)
net cash
|
19 | |||||||||||
|
Ultrapar
Equity value (before steps 1 and 2)
|
5,898 | |||||||||||
|
(+)
assets acquired (a)
|
497 | |||||||||||
|
(-)
price paid(b)
|
(876 | ) |
|
|||||||||
|
Ultrapar
equity value (after steps 1 and 2)
|
5,520 | |||||||||||
|
Total
number of shares (million)
|
81.3 | |||||||||||
|
Price
per share – R$ per share
|
64.48 | 67.87 | 71.26 | |||||||||
 |
||||||||||||
|
-5%
|
+5%
|
|||||||||||
Note:
Figures in R$ million unless otherwise noted.
(a)
refer
to page 38 of the Valuation
Report for more details
(b)
Net value
to
be paid by Ultrapar for steps 1 and 2, net of the value received
from
Dynamo
for
the sale of certain Ipiranga PN’s shares
Source:
Ultrapar information and Deutsche Bank
|
Weighted
average share price
LTM
to
announcement(a)
|
||||||||
|
ON
|
|
PN
|
||||||
|
Total
volume (000’s)
|
NA
|
17,108
|
||||||
|
W.A.
share price (R$ per share)
|
NA
|
43.08
|
||||||
(a)
From
03/15/2006 to 03/16/2007
Note:
Ultrapar’s ON shares have not traded for over 12 months.Source:
FactSet
|
Book
value – Ultrapar
|
||||
|
12/31/2006
|
||||
|
Shareholder
equity – (R$ million)
|
1,940.7
|
|||
|
Total
number of shares (million)
|
81.3
|
|||
|
Book
value per share (R$ per share)
|
23.86
|
|||
Note:
Book value based on operating company financials
as of 12/31/2006
Source:
Company’s filings
|
Weighted
average share price
announcement
to April 2, 2007(a)
|
||||||||
|
ON
|
|
PN
|
||||||
|
Total
volume (000’s)
|
NA
|
2,822
|
||||||
|
W.A.
share price (R$ per share)
|
NA
|
56.10
|
||||||
(a)
From 03/16/2007 to 04/02/2007
|
12
|
| Valuation summary |
Section
2
|
Tab
B
RIPI
|
13
|
| Valuation summary |
Section
2
|
Refinaria
Petroleo Ipiranga SA – RIPI
Company
description
|
■
|
RIPI
is a holding company for
certain Ipiranga investments and operates a
refinery
|
Major
subsidiaries
|
■
|
Companhia
Brasileira de
Petroleo Ipiranga
(CBPI)
|
|
|
-
|
A
fuels distributor in Brazil,
except in Rio Grande do Sul, Roraima and
Amapá
|
|
|
-
|
2006
revenue of US$9.8 billion and
volume sold of 12.2 billion cubic
meters
|
|
■
|
Distrib.
de Produtos de
Petroleo Ipiranga
(DPPI)
|
|
|
-
|
A
fuels distributor in Southern
Brazil
|
|
|
-
|
2006
revenue of $1.6 billion and
volume sold of 1.8 billion cubic
meters
|
|
■
|
Ipiranga
Química
(IQ)
|
|
|
-
|
A
wholesale distributor of
chemical products with over 5,000 clients in 50 different
markets
|
|
|
-
|
2006
revenue of US$212.3 million
and EBITDA of US$9.5 million
|
|
|
-
|
Through
its ownership in IQ, RIPI
indirectly controls Copesul (with Braskem) and
IPQ
|
|
■
|
Ipiranga
Petroquímica
(IPQ)
|
|
|
-
|
A
2nd
generation
producer of high-end
petrochemicals
|
|
|
-
|
2006
revenue of US$924.3 million
and volume sold of 636,100
tons
|
|
■
|
Copesul
|
|
|
-
|
A
naphtha-based cracker owned by
Ipiranga & Braskem
|
|
|
-
|
2006
revenue of US$2.9 billion and
volume of 2.962 million tons
|
Note:
Volume sold refers to total volume; Revenue figures not
consolidated
Source:
Public RIPI information
Note: Families include Gouvea, Tellechea, Mello, bastos, and Ormazabal families Source: Public Ipiranga information |
|
14
|
| Valuation summary |
Section
2
|
RIPI
valuation
RIPI’s
share value ranges
from
R$51.63 to R$57.06
based on the economic
value
|
Economic
value
|
||||||||||||||||
|
100%
|
Proportionate
|
|||||||||||||||
|
(R$
million)
|
TEV
|
TEV
|
||||||||||||||
| IQ SA |
3,051
|
58.53 | % |
1,786
|
||||||||||||
|
CBPI
SA
|
4,029
|
11.42 | % |
460
|
||||||||||||
|
DPPI
SA
|
1,552
|
7.65 | % |
119
|
||||||||||||
|
RIPI
Opco1
|
9
|
100.0 | % |
9
|
||||||||||||
|
RIPI
– Total Enterprise Value
|
2,373
|
|||||||||||||||
|
(-)
net debt
|
(765 | ) | ||||||||||||||
|
RIPI
– Equity value
|
1,609
|
|||||||||||||||
|
Total
number of shares (million)
|
29.6
|
|||||||||||||||
|
Price
per share – R$ per share
|
51.63
|
54.35
|
57.06
|
|||||||||||||
|
|
||||||||||||||||
| -5 | % | +5 | % | |||||||||||||
|
Note:
Figures
in R$ million unless otherwise noted.
(1)
Based on multiples detailed on pages 61 and
83
Source:
RIPI information and Deutsche Bank
|
||||||||||||||||
|
Weighted
average share price
LTM
to
announcement(a)
|
||||||||
|
ON
|
|
PN
|
||||||
|
Total
volume (000’s)
|
1,843
|
5,850
|
||||||
|
W.A.
share price (R$ per share)
|
45.81
|
32.75
|
||||||
|
(a)
From 03/15/2006 to 03/16/2007
|
||||||||
|
Source:
FactSet
|
||||||||
|
Book
value – RIPI SA
|
||||
|
12/31/2006
|
||||
|
Shareholder
equity – (R$ million)
|
577.3
|
|||
|
Total
number of shares (million)
|
29.6
|
|||
|
Book
value per share (R$ per share)
|
19.50
|
|||
Note:
Book value based on operating company financials as of 12/31/2006
Source:
Company’s filings
|
Weighted
average share price
announcement
to April 2, 2007(a)
|
||||||||
|
ON
|
PN
|
|||||||
|
Total
volume (000’s)
|
528
|
1,495
|
||||||
|
W.A.
share price (R$ per share)
|
91.57
|
44.85
|
||||||
|
(a)
From 03/16/2007 to 04/02/2007
|
||||||||
|
Source:
FactSet
|
||||||||
|
15
|
| Valuation summary |
Section
2
|
Tab
C
DPPI
|
16
|
| Valuation summary |
Section
2
|
Distribuidora
de Produtos de Petroleo Ipiranga SA – DPPI
Company
description
|
■
|
DPPI
is a distributor of fuels in
Southern Brazil
|
|
■
|
The
Company delivers fuels to
retail gas stations, industrial
sites
|
|
■
|
Approximately
65% of volume is
sold to retail gas stations
|
|
■
|
In
2006, core volume (gasoline,
alcohol, and diesel fuels) was 1.8 billion cubic meters. Total
volume
(including GNV, lubricants, & others) was marginally
higher
|
|
■
|
In
2006, the Company had 2.5% of
the Brazilian market by volume
sold
|
Major
subsidiaries
|
■
|
|
Isa-Sul
Administração e
Participações
(Isa-Sul)
|
|
|
-
|
Owns
152 of the gas stations in
DPPI’s region
|
|
|
-
|
2006
revenue of US$8.7 million and
EBITDA of US$7.5
million
|
|
■
|
|
Companhia
Brasileira de
Petroleo Ipiranga
(CBPI)
|
|
|
-
|
A
fuels distributor in Brazil, except in Rio Grande do Sul, Roraima
and
Amapá
|
|
|
-
|
2006
revenue of US$9.8 billion and
volume sold of 12.2 billion cubic
meters
|
|
|
-
|
Through
its ownership in CBPI,
DPPI indirectly owns a minority stake in IQ, IPQ, and
Copesul
|
| ■ |
|
Ipiranga
Química
(IQ)
|
|
|
-
|
A
wholesale distributor of
chemical products with over 5,000 clients in 50 different
markets
|
|
|
-
|
2006
revenue of US$212.3 million
and EBITDA of US$9.5 million
|
|
■
|
|
Ipiranga
Petroquímica
(IPQ)
|
|
|
-
|
A
2nd
generation
producer of high-end
petrochemicals
|
|
|
-
|
2006
revenue of US$924.3 million
and volume sold of 636,100
tons
|
|
■
|
|
Copesul
|
|
|
-
|
A
naphtha-based cracker owned by
Ipiranga & Braskem
|
|
|
-
|
2006
revenue of US$2.9 billion and
volume of 2.962 million tons
|
Note:
Volumes
refer to volumes sold. Revenues are not consolidated
Source:
Public
DPPI information
Corporate structure Note: Families include Gouvea, Tellechea, Mello, Bastos, and Ormazabal families Source: Public Ipiranga information |
|
17
|
| Valuation summary |
Section
2
|
DPPI
valuation
DPPI’s
share value ranges from R$41.11 to
R$45.44 based on the economic value
|
Economic
value
|
||||||||||||||||
|
100%
|
Proportionate
|
|||||||||||||||
|
(R$
million)
|
TEV
|
TEV
|
||||||||||||||
| CBPI |
4,029
|
21.01 | % |
847
|
||||||||||||
|
DPPI
Opco1
|
706
|
100.00 | % |
706
|
||||||||||||
|
DIPPI
– Total Enterprise Value
|
1,552
|
|||||||||||||||
|
(-)
net debt
|
(168 | ) | ||||||||||||||
|
DPPI
– Equity value
|
1,385
|
|||||||||||||||
|
Total
number of shares (million)
|
32.0
|
|||||||||||||||
|
Price
per share – R$ per share
|
41.11
|
43.28
|
45.44
|
|||||||||||||
|
|
||||||||||||||||
| -5 | % | +5 | % | |||||||||||||
|
Note:
Figures in R$ million, except unless otherwise
noted
(1)
Further details on page 83
|
||||||||||||||||
| Source: DPPI information and Deutsche Bank | ||||||||||||||||
|
Weighted
average share price
LTM
to
announcement(a)
|
||||||||
|
ON
|
|
PN
|
||||||
|
Total
volume (000’s)
|
24
|
2,919
|
||||||
|
W.A.
share price (R$ per share)
|
41.69
|
24.99
|
||||||
|
(a)
From 03/15/2006 to 03/16/2007
|
||||||||
|
Source:
FactSet
|
||||||||
|
Book
value – DPPI SA
|
||||
|
12/31/2006
|
||||
|
Shareholder
equity – (R$ million)
|
804.0
|
|||
|
Total
number of shares (million)
|
32.0
|
|||
|
Book
value per share (R$ per share)
|
25.13
|
|||
Note:
Book value based on operating company financials as of 12/31/2006
Source:
Company’s filings
|
Weighted
average share price
announcement
to April 2, 2007(a)
|
||||||||
|
ON
|
PN
|
|||||||
|
Total
volume (000’s)
|
61
|
514
|
||||||
|
W.A.
share price (R$ per share)
|
96.53
|
34.69
|
||||||
|
(a)
From 03/16/2007 to 04/02/2007
|
||||||||
|
Source:
FactSet
|
||||||||
|
18
|
| Valuation summary |
Section
2
|
Tab
D
CBPI
|
19
|
| Valuation summary |
Section
2
|
Companhia
Brasileira de Petroleo Ipiranga – CBPI
Company
description
|
■
|
The
largest company in the Ipiranga Group by revenue, CBPI is a distributor
of
fuels in Brazil, except in Rio Grande do Sul, Roraima and
Amapá
|
|
■
|
The
Company delivers fuels to
retail gas stations, industrial
sites
|
|
■
|
Approximately
65% of volume is
sold to retail gas stations
|
|
■
|
In
2006, core volume (gasoline,
alcohol, and diesel fuels) was 11.6 billion cubic meters. Total
volume
(including GNV, lubricants, & others) was 12.2 billion cubic
meters
|
|
■
|
In
2006, the Company had 16.9%
share of the Brazilian market by
volume
|
Major
subsidiaries
|
■
|
Empresa
Carioca de
Produtos Químicos
(EMCA)
|
|
|
-
|
Produces
specialty oils with
applications in the pharmaceutical, food, cosmetic, and plastics
industries
|
|
|
-
|
2006
revenue of US$42.5 million
and EBITDA of US$1.4 million
|
|
■
|
Ipiranga
Asfaltos
(IASA)
|
|
|
-
|
Produces
asphalt and asphalt
additives, and provides pavement
services
|
|
|
-
|
2006
sales of US$114.3 million and
EBITDA of US$6.1 million
|
|
■
|
AM/PM
Comestíveis
|
|
|
-
|
A
chain of retail convenience
stores attached to CBPI gas
stations
|
|
|
-
|
2006
sales of US$8.4 million and
EBITDA of US$14.7 million, which includes other operating
income
|
|
■
|
Ipiranga
Química SA
(IQ)
|
|
|
-
|
A
wholesale distributor of
chemical products with over 5,000 clients in 50 different
markets
|
|
|
-
|
2006
revenue of US$212.3 million
and EBITDA of US$9.5 million
|
|
-
|
Through its ownership in IQ, CBPI, indirectly has a stake in IPQ and Copesul |
|
■
|
Ipiranga
Petroquímica
(IPQ)
|
|
|
-
|
A
2nd
generation
producer of high-end
petrochemicals
|
|
-
|
2006
revenue of US$924.3 million
and volume sold of 636,100
tons
|
|
■
|
Copesul
|
|
|
-
|
A
naphtha-based cracker owned by
Ipiranga & Braskem
|
|
|
-
|
2006
revenue of US$2.9 billion and
volume of 2.962 million tons
|
Source:
Public CBPI information
Corporate structure Note: Families include Gouvea, Tellechea, Mello, Bastos, and Ormazabal families |
|
20
|
| Valuation summary |
Section
2
|
CBPI’s
share value ranges
from R$26.97 to R$29.81
based on the economic
value
 |
Economic value Book value - CBPI
-------------- -----------------
(R$ million) 100% Proportionate 12/31/2006
TEV TEV ----------
Copesul 5,635 29.46% 1,660 (1) Shareholder equity - (R$ million) 1,555.2
IPQ Opco 1,452 100.00% 1,452 (2) Total number of shares (million) 106.0
100% IPQ SA. 3,112 (3)=(1)+(2) Book value per share (R$ per share) 14.68
IPQ SA. 3,112 92.39% 2,875 (4)=(3)x stake
IQ Opco 176 100.00% 176 (5)
100% IQ SA 3,051 (6)=(4)+(5)
IQ SA 3,051 41.47% 1,265 (7)=(6)x stake
CBPI Opco 2,764 100.00% 2,764 (8)
CBPI - Total Enterprise Value 4,029 (9)=(7)+(8)
(-) net debt (1,021)
CBPI - Equity Value 3,008
Total number of shares (million) 106.0
Price per share - R$ per share 26.97 28.39 29.81
-----------------
-5% +5%
Note: Figures in R$ million, except unless otherwise noted Note: Book value based on operating company financials
Source: Ipiranga information and Deutsche Bank as of 12/31/2006
Source: Company's filings
Weighted average share price Weighted average share price
LTM to announcement (a) announcement to April 2, 2007 (a)
----------------------------------------------------- ----------------------------------------------------
ON PN ON PN
======= ========= ======= =========
Total volume (000's) 123 62.524 Total volume (000's) 168 7,946
W.A. share price (R$ per share) 21.72 18.32 W.A. share price (R$ per share) 52.55 23.28
(a) From 03/15/2006 to 03/16/2007 (a) From 03/16/2007 to 04/02/2007
Source: FactSet Source: FactSet
|
|
21
|
| Economic value of assets |
Section
3
|
Section
3
Economic
value of assets
|
22
|
| Economic value of assets |
Section
3
|
Valuation
considerations
The
companies were valued on a stand-alone basis
The
valuation of each asset excludes any potential synergies that could be achieved
as a result of the transaction
|
DCF
|
||
| n | Basic assumptions | |
| – | 10-year projections | |
| – | Base date of DCF valuation is December 31, 2006 | |
| – | Exchange rate of 2.1385 R$/US$ as of 12/31/2006 | |
| – | Models projected in nominal Brazilian Reais; cash flows were converted to US Dollars based on average exchange rate for the year | |
| – | WACC in nominal US Dollars | |
| – | To discount the annual cash flow to the present value, it considers that cash flow is generated in the middle of the year (in June)1 | |
| n | Perpetuity | |
| – | Calculated based on Gordon’s growth formula | |
| – | Adjustments to capex/ depreciation, tax rates, net operating working capital | |
| – | Petrochemical companies: perpetuity cash flow adjusted for mid-cycle | |
| n | Equity value | |
| – | TEV minus net debt (as defined in the glossary) | |
|
DCF
valuation
|
||
|
n
|
Companhia
Brasileira de Petróleo Ipiranga
|
|
n
|
Distribuidora
de Prod. de Petróleo Ipiranga
|
|
n
|
Copesul
Central Química
|
|
n
|
Ipiranga
Petroquímica S.A.
|
|
n
|
Ultrapar
Participações
|
| Source: Ultrapar and Deutsche Bank |
|
Multiples
|
||
| n | Basic assumptions | |
| – | Based on multiples of EBITDA | |
| n | Precedent transactions | |
| – | Applied to LTM EBITDA | |
| n | Trading comparables | |
| – | Applied to 2006 EBITDA except for petrochemicals, where an average of 3 - 5 years (normalized EBITDA) was used depending on the company | |
|
Multiple
-based valuation
|
||
|
n
|
Ipiranga
Química S.A. – precedent
transactions
|
|
n
|
Empresa
Carioca de Prod. Químicos S.A. – trading
comps
|
|
n
|
Ipiranga
Asfaltos – precedent transactions
|
|
n
|
AM/PM
Comestíveis – trading comps
|
|
n
|
Isa-Sul
Adm.
e Part. Ltda – implied multiple from DPPI
DCF
|
| Source: Ultrapar and Deutsche Bank |
1
Assumes that the cash is generated evenly over the year, and for the purpose
of
discounting it to the net present value, it assumes the generation of cash
occurs in the middle of the year (i.e. June), and not at the end of the
year
(i.e. December)
|
23
|
| Economic value of assets |
Section
3
|
Weighted
Average Cost of Capital and Cost of Equity
WACC
and Ke
WACC
definition
(US$
nominal)
|
Ipiranga
companies
|
|||||||||
|
|
Ultrapar
|
CBPI
|
DPPI
|
Copesul
|
IPQ
|
||||
| I. Beta calculation | |||||||||
|
1.
Beta un-levered (a)
|
0.64
|
0.90
|
0.90
|
0.86
|
0.86
|
||||
|
Long-term
optimal debt (D)/cap (D+E) ratio
|
35%
(b)
|
40%
(c)
|
40%
(c)
|
50%
(c)
|
50%
(c)
|
||||
|
Long-term
optimal equity (E) /cap (D+E) ratio
|
65%
(b)
|
60%
(c)
|
60%
(c)
|
50%
(c)
|
50%
(c)
|
||||
|
Marginal
tax
rate (tax)(d)
|
22%
|
26%
|
23%
|
33%
|
25%
|
||||
|
2.
Re-levered equity beta (β)
|
0.92
|
1.35
|
1.36
|
1.44
|
1.50
|
||||
|
II.
Calculation of Cost of Capital
|
|
|
|
|
|
||||
|
US
risk free
rate (Rfr) (e)
|
4.5%
p.a.
|
4.5%
p.a.
|
4.5%
p.a.
|
4.5%
p.a.
|
4.5%
p.a.
|
||||
|
Local
risk
premium (CRP) (f)
|
200
bps
|
200
bps
|
200
bps
|
200
bps
|
200
bps
|
||||
|
Local
long-term risk free rate
|
6.5%
p.a.
|
6.5%
p.a.
|
6.5%
p.a.
|
6.5%
p.a.
|
6.5%
p.a.
|
||||
|
US
equity risk
premium (ERP) (g)
|
7.1%
p.a.
|
7.1%
p.a.
|
7.1%
p.a.
|
7.1%
p.a.
|
7.1%
p.a.
|
||||
|
3.
Cost of Equity (Ke)
|
13.0%
p.a.
|
16.1%
p.a.
|
16.2%
p.a.
|
16.7%
p.a.
|
17.2
p.a.%
|
||||
|
Local
long-term risk free rate
|
6.5%
p.a.
|
6.5%
p.a.
|
6.5%
p.a.
|
6.5%
p.a.
|
6.5%
p.a.
|
||||
|
Long-term
corporate risk spread (h)
|
150
bps
|
200
bps
|
200
bps
|
200
bps
|
200
bps
|
||||
|
4.
Cost of Debt (Kd)
|
8.0%
p.a.
|
8.50%
p.a.
|
8.50%
p.a.
|
8.50%
p.a.
|
8.50%
p.a.
|
||||
|
5.
WACC
|
10.6%
p.a.
|
12.2%
p.a.
|
12.3%
p.a.
|
11.2%
p.a.
|
11.8%
p.a.
|
||||
|
Note:
|
(a)
Ultrapar’s
beta is the observed and the betas for Grupo Ipiranga’s companies are the
betas against the S&P 500 for the sample of companies that represent
each industry. Based on 2 years of weekly betas. CBPI and
DPPI’s betas
were based on Pantry Inc, Casey’s General Stores, and Alimentacion Couche
Tard Inc.2
Copesul and IPQ’s betas were based on Copesul, Braskem, Suzano
Petroquímica, Petroquímica União, BASF and Nova Chemicals (source:
Bloomberg as of February 18, 2007)
|
|
(b)
Based on a
more conservative company risk profile than the optimal capital
structure
for the industry
|
|
|
(c)
Based on
comparable public companies
|
|
|
(d)
Marginal
tax rates as provided by the management of the companies.
Refer to
supporting material in Appendix IV
|
|
|
(e)
US risk
free rate is the yield of the US Treasury (source:
FactSet)
|
|
|
(f)
Local risk
premium based on spread of the sovereign bond to the equivalent
US
Treasury (source: Bloomberg)
|
|
|
(g)
Equity
risk premium from Ibbotson’s 2006 report
|
|
|
(h)
Long term
corporate risk spreads are based on companies outstanding
debt
(source: the companies’
financials)
|
|
Source:
Bloomberg, Factset and the
companies
|
2
Pantry
Inc., Casey’s
General Stores, and Alimentation Couche Tard Inc. are businesses whose
principal
activities include the distribution of gasoline (77%, 71%, and 58%
of 2006 sales
respectively). The operation of convenience stores is a secondary activity
totally dependent on the distribution of gasoline
|
24
|
| Economic value of assets |
Section
3
|
Macroeconomic
assumptions
|
US
Economy
|
2004A
|
2005A
|
2006A
|
2007E
|
2008E
|
2009E
|
2010E
|
2011E
|
2012E
|
2013E
|
2014E
|
2015E
|
2016E
|
|
Inflation(1)
|
1.6%
|
2.6%
|
2.3%
|
2.0%
|
2.0%
|
2.0%
|
2.0%
|
2.0%
|
2.0%
|
2.0%
|
2.0%
|
2.0%
|
2.0%
|
|
US
Treasury(1)
|
4.1%
|
4.1%
|
4.7%
|
4.5%
|
5.0%
|
5.0%
|
5.0%
|
5.0%
|
5.0%
|
5.0%
|
5.0%
|
5.0%
|
5.0%
|
|
Brazil
Economy
|
2004A
|
2005A
|
2006A
|
2007E
|
2008E
|
2009E
|
2010E
|
2011E
|
2012E
|
2013E
|
2014E
|
2015E
|
2016E
|
|
GDP
- real growth(2)
|
4.9%
|
2.3%
|
2.9%
|
3.5%
|
3.7%
|
3.6%
|
3.4%
|
3.3%
|
3.1%
|
3.0%
|
3.0%
|
3.0%
|
3.0%
|
|
GDP
- nominal growth
|
12.8%
|
9.7%
|
6.1%
|
7.4%
|
7.8%
|
7.2%
|
7.0%
|
6.9%
|
6.7%
|
6.6%
|
6.6%
|
6.6%
|
6.6%
|
|
Brazilian
population growth(3)
|
1.5%
|
1.4%
|
1.4%
|
1.4%
|
1.3%
|
1.3%
|
1.3%
|
1.2%
|
1.2%
|
1.2%
|
1.1%
|
1.1%
|
1.1%
|
|
Inflation
(IPCA)(1)
|
7.6%
|
5.7%
|
3.1%
|
3.8%
|
4.0%
|
3.5%
|
3.5%
|
3.5%
|
3.5%
|
3.5%
|
3.5%
|
3.5%
|
3.5%
|
|
Selic
(average)(4)
|
16.2%
|
19.0%
|
15.1%
|
12.2%
|
11.1%
|
10.0%
|
9.5%
|
9.5%
|
9.5%
|
9.5%
|
9.5%
|
9.5%
|
9.5%
|
|
CDI
(Brazilian interbank rate)(1)
|
16.2%
|
19.0%
|
15.0%
|
12.7%
|
11.6%
|
10.5%
|
10.0%
|
10.0%
|
10.0%
|
10.0%
|
10.0%
|
10.0%
|
10.0%
|
|
FX
rate - eop(5)
|
2.65
|
2.34
|
2.14
|
2.18
|
2.29
|
2.32
|
2.36
|
2.39
|
2.43
|
2.46
|
2.50
|
2.54
|
2.57
|
|
FX
rate - avg(5)
|
2.93
|
2.43
|
2.19
|
2.16
|
2.24
|
2.31
|
2.34
|
2.38
|
2.41
|
2.45
|
2.48
|
2.52
|
2.56
|
|
Average
R$ devaluation
|
(20.3%)
|
(9.9%)
|
(1.5%)
|
3.7%
|
3.0%
|
1.5%
|
1.5%
|
1.5%
|
1.5%
|
1.5%
|
1.5%
|
1.5%
|
|
Notes
and
Sources:
|
|
(1)
Based on
estimates of the market and Deutsche
Bank
|
|
(2)
Based on
IBGE’s old methodology3. Source: IBGE for 2004 to 2006, and
based on estimates of the market and Deutsche Bank for
2007 and
onwards
|
|
(3)
IBGE –
Brazilian Institute of Geography and
Statistics
|
|
(4)
Market
consensus for 2007 and 2008 (source: BCB, February 2007) and
based on estimates of the market and Deutsche Bank for
2009 and
onwards
|
|
(5)
Market
consensus for 2007 and 2008 (source: BCB, February 2007). Brazil
– USA purchase power parity (PPP) for 2009
onwards
|
3IBGE
had recently published the
parameters of a new methodology for the calculation of Brazilian GDP,
however at
the time of publication of the Report, projections based on the new
methodology
were not available. We therefore consider it most appropriate to use
the old
methodology, based on which projections were
available.
|
25
|
| Economic value of assets |
Section
3
|
Tab
A
Ultrapar
|
26
|
| Economic value of assets |
Section
3
|
Ultrapar
consolidated - DCF valuation
Ultrapar
consolidates: Ultragaz, the #1 LPG distributor in Brazil, Oxiteno, the
main
producer of Ethylene Oxide and its main derivatives in Latin America,
and
Ultracargo, a logistic company for special products
|
2007E
|
2008E
|
2009E
|
2010E
|
2011E
|
2012E
|
2013E
|
2014E
|
2015E
|
2016E
|
Perp.
|
||||||||||||
|
1.
EBIT
|
157
|
163
|
218
|
239
|
249
|
251
|
257
|
286
|
297
|
347
|
364
|
|||||||||||
|
annual
growth
|
n.a.
|
4.1%
|
|
33.2%
|
9.7%
|
|
4.4%
|
0.6%
|
2.4%
|
11.3%
|
3.9%
|
16.8%
|
5.0%
|
|||||||||
|
|
||||||||||||||||||||||
|
(-)
tax
|
(37)
|
(38)
|
(47)
|
|
(51)
|
(53)
|
(54)
|
(56)
|
(64)
|
(67)
|
(77)
|
(80)
|
||||||||||
|
effective
tax rate
|
(23.4%)
|
(23.5%)
|
|
(21.6%)
|
(21.3%)
|
(21.1%)
|
(21.5%)
|
(21.7%)
|
(22.4%)
|
(22.6%)
|
(22.1%)
|
(22.1%)
|
||||||||||
|
|
|
|||||||||||||||||||||
|
3.
EBIT (-) tax
|
120
|
125
|
171
|
188
|
|
197
|
197
|
201
|
222
|
|
230
|
270
|
284
|
|||||||||
|
(+)
Depreciation & Amortization
|
93
|
103
|
|
111
|
119
|
127
|
131
|
134
|
116
|
119
|
87
|
87
|
||||||||||
|
(-)
Capex
|
(253)
|
(154)
|
(103)
|
(96)
|
(99)
|
(101)
|
(104)
|
(106)
|
(100)
|
(98)
|
(87)
|
|||||||||||
|
(-)
Changes in net operating working capital
|
(7)
|
(19)
|
(50)
|
(21)
|
(19)
|
(17)
|
(16)
|
(13)
|
(11)
|
(11)
|
(11)
|
|||||||||||
|
|
||||||||||||||||||||||
|
4.
Free cash flow to the Firm
|
(47)
|
56
|
129
|
190
|
206
|
|
209
|
215
|
218
|
238
|
248
|
272
|
||||||||||
|
annual
growth
|
n.a
|
n.m
|
130.4%
|
47.8%
|
8.3%
|
1.5%
|
3.0%
|
1.5%
|
9.0%
|
4.0%
|
n.m
|
Note: Annual
free cash flow in US$ millions
Effective
tax
rate based on the effective tax rates of Ultragaz, Oxiteno, and
Ultracargo
Perpetuity’s
cash
flow is based on long-term real growth of 3% corresponding to long-term
expectations for GDP growth. These assumptions were evaluated in due
diligence
sessions confirmed by management of the businesses and are considered
consistent
with long-term growth expectations in each sector
Source:
Company
information and Ultrapar management guidance
TEV (R$ million) (R$ million) Perpetuity growth(a) (Gordon's growth model) (a) Values converted into Reais at 2.14 R$/US$. Net present value and perpetuity value calculated in US$ TEV/ 2007 EBITDA (R$ million) Perpetuity growth(a) (Gordon's growth model) (a) Values converted into Reais at 2.14 R$/US$. Net present value and perpetuity value calculated in US$ |
|
27
|
| Economic value of assets |
Section
3
|
Assumptions
- Ultragaz
Selected
income statement drivers
Bottled
LPG
volumes are driven by population growth, while Bulk sales are driven by GDP
growth
Cash
gross
margins per ton are constant in real terms adjusted for Brazilian inflation
Note: Excludes depreciation Source: Company information and Ultrapar management guidance |
|
28
|
| Economic value of assets |
Section
3
|
Assumptions
- Ultragaz (continued)
Selected
income statement drivers
Revenues
are
driven by increasing volumes and are adjusted for inflation
Selling
expenses are constant as a percentage of sales, while General and Administrative
expenses are adjusted for inflation
|
29
|
| Economic value of assets |
Section
3
|
Assumptions
- Ultragaz (continued)
Selected
balance sheet drivers
Capex/ton
is
based on sales volumes and adjusted for inflation
Based
on
property, plant and equipment depreciation schedule
|
Change
in net
operating working capital
|
||||||||||||||||||||||||
| Net operating working capital (R$ million) |
2005A
|
2006A
|
2007E
|
2008E
|
2009E
|
2010E
|
2011E
|
2012E
|
2013E
|
2014E
|
2015E
|
2016E
|
||||||||||||
|
Net
operating working capital
|
150.2
|
126.4
|
133.5
|
141.9
|
150.0
|
158.5
|
167.4
|
176.6
|
186.2
|
196.3
|
207.0
|
218.2
|
||||||||||||
|
(+)
current assets
|
216
|
203
|
215
|
228
|
241
|
255
|
269
|
284
|
299
|
316
|
333
|
351
|
||||||||||||
|
(-)
current liabilities
|
(65)
|
(77)
|
(81)
|
(87)
|
(91)
|
(97)
|
(102)
|
(107)
|
(113)
|
(119)
|
(126)
|
(132)
|
||||||||||||
|
Change
in net operating working capital
|
||||||||||||||||||||||||
|
(Increase)
/ Decrease in net operating working capital
|
(7)
|
(8)
|
(8)
|
(8)
|
(9)
|
(9)
|
(10)
|
(10)
|
(11)
|
(11)
|
||||||||||||||
Source: Company information
and
Ultrapar management guidance
|
30
|
| Economic value of assets |
Section
3
|
Assumptions
- Oxiteno
Selected
income statement drivers
Oxiteno
is
currently in the process of increasing its capacity (expected to be fully
operational in 2009)
Oxiteno’s
strategy is to meet Brazil’s demand for specialties (expected to grow twice as
fast as GDP)
Specialties
prices are constant in US Dollars and commodities prices are based on CMAI
projections in US Dollars
|
31
|
| Economic value of assets |
Section
3
|
Assumptions
- Oxiteno (continued)
Selected
income statement drivers
Revenue
forecast reflects the capacity expansion and
change in production mix
Sales
are
expected to shift over-time from commodities to specialties and from exports
to
the domestic market
The
production
shift to specialties diminishes the cyclicality of the EBITDA
margin
|
32
|
| Economic value of assets |
Section
3
|
Assumptions
- Oxiteno (continued)
Selected
balance sheet drivers
Capex
is based on Ultrapar guidance relating to the capacity increase
Based
on property, plant and equipment depreciation schedule
Net
operating working capital assumptions are in line with 2006
|
Change
in net
operating working capital
|
|||||||||||||||||||||||||||||||||||||
|
Net
operating working capital (R$
million)
|
2005A
|
2006A
|
2007E
|
2008E
|
2009E
|
2010E
|
2011E
|
2012E
|
2013E
|
2014E
|
2015E
|
2016E
|
|||||||||||||||||||||||||
|
Net
operating working capital
|
259.5
|
361.2
|
368.0
|
400.0
|
504.5
|
543.7
|
580.0
|
611.8
|
641.0
|
661.7
|
677.3
|
694.2
|
|||||||||||||||||||||||||
|
(+)
current assets
|
352
|
468
|
478
|
520
|
651
|
700
|
747
|
791
|
830
|
858
|
878
|
898
|
|||||||||||||||||||||||||
|
(-)
current liabilities
|
(92
|
)
|
(107
|
)
|
(110
|
)
|
(120
|
)
|
(147
|
)
|
(157
|
)
|
(167
|
)
|
(179
|
)
|
(189
|
)
|
(196
|
)
|
(200
|
)
|
(204
|
)
|
|||||||||||||
|
Change
in net operating working capital
|
|||||||||||||||||||||||||||||||||||||
|
(Increase)
/ Decrease in net operating working capital
|
(7
|
)
|
(32
|
)
|
(105
|
)
|
(39
|
)
|
(36
|
)
|
(32
|
)
|
(29
|
)
|
(21
|
)
|
(16
|
)
|
(17
|
)
|
|||||||||||||||||
Source:
Company information and Ultrapar management guidance
4
Relevant
investment projects of the
Oxiteno subsidiary are: expansion of the production capacity of ethylene
oxide
and specialty chemicals at Camaçari, Bahia; a new plant for fatty alcohols and
derivatives at Camaçari, Bahia; and the expansion of production capacity of
ethylene oxide and specialty chemicals at Mauá, São Paulo, as announced to the
market through Ultrapar’s press releases dated August 17, 2006, and February 16,
2005
|
33
|
| Economic value of assets |
Section
3
|
Assumptions
- Ultracargo
Selected
income statement drivers
Storage capacity utilized increasing from 78% as of 2007 to 95% as of 2010 based on Ultracargo guidance
Transportation
capacity utilized increasing from 84% as of 2007 to 95% as of 2010
|
34
|
| Economic value of assets |
Section
3
|
Assumptions
- Ultracargo (continued)
Selected
income statement drivers
Revenues
increase as a result of volume growth and price inflation
|
35
|
| Economic value of assets |
Section
3
|
Assumptions - Ultracargo (continued)
Selected
balance sheet drivers
Capacity
increase between 2004 and 2006
Based
on property, plant and equipment depreciation schedule
Net
operating working capital assumptions are in line with
2006
|
Change
in net operating working
capital
|
|||||||||||||||||||||||||||||||||||||
| Net operating working capital (R$ million) | 2005A | 2006A | 2007E | 2008E | 2009E | 2010E | 2011E | 2012E | 2013E | 2014E | 2015E | 2016E | |||||||||||||||||||||||||
|
Net
operating
working capital
|
14.0
|
16.1
|
17.7
|
19.4
|
21.1
|
22.9
|
23.9
|
24.9
|
26.0
|
27.1
|
28.2
|
29.5
|
|||||||||||||||||||||||||
|
(+)
current
assets
|
33
|
35
|
38
|
42
|
46
|
50
|
52
|
54
|
57
|
59
|
62
|
64
|
|||||||||||||||||||||||||
|
(-)
current
liabilities
|
(19
|
)
|
(19
|
)
|
(20
|
)
|
(23
|
)
|
(25
|
)
|
(27
|
)
|
(28
|
)
|
(29
|
)
|
(31
|
)
|
(32
|
)
|
(33
|
)
|
(35
|
)
|
|||||||||||||
|
Change
in net operating working capital
|
|||||||||||||||||||||||||||||||||||||
|
(Increase)
/
Decrease in net operating working capital
|
(2
|
)
|
(2
|
)
|
(2
|
)
|
(2
|
)
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
|||||||||||||||||
Source:
Company information and Ultrapar management
guidance
|
36
|
| Economic value of assets |
Section
3
|
Tab
B
Ultrapar
prior to the share merger
|
37
|
| Economic value of assets |
Section
3
|
Ultrapar
prior to the share merger
After
completing the acquisition of the control block (step 1) and tendering for
the
other voting shareholders (step 2), Ultrapar will have acquired 41.3% of
RIPI,
35.4% of DPPI, and 4.1% of CBPI
Ultrapar
will spend R$876 million on steps 1 and 2
o After completing steps 1 and 2, Ultrapar will have acquired 41.3%
of RIPI, 35.4% of DPPI, and 4.1% of CBPI
o Ultrapar will spend R$876 million on steps 1 and 2
o These stakes are equivalent to 41.3% of the refinery, 38.5% of the
distribution business of DPPI, and 16.9% of the distribution
business of CBPI
Stake Stake
Ipiranga SA at S.A. at Opco
----------- ------- -------
RIPI SA 41.3% 41.3% Refinery
DPPI SA 35.4% 38.5% DPPI
distribution
CBPI
CBPI SA 4.1% 16.9% distribution
(R$ million) TEV (5) Equity
Assets acquired by Ultrapar 591 497
------------------------------------------------------
Refinery (1) 41,3% 1 (10)
DPPI 38,5% 272 290
distribution (2)
CBPI 16,9% 315 217
distribution (3)
CBPI EMCA (4) 16,9% 3 0
(1) Includes 1/3 of the Refinery only
(2) Includes ISA-Sul
(3) Includes CBPI distribution and the AM/PM
convenience stores in the South and Southeast
(3) Assumes that Petrobras will pay with cash for 100%
of its stake and will assume no debt from CBPI
(4) EMCA will be 100% owned by Ultrapar
(5) Represents Ultrapar's stake in the acquired assets
|
|
38
|
| Economic value of assets |
Section
3
|
Tab
C
Fuel distribution
- CBPI
|
39
|
| Economic value of assets |
Section
3
|
CBPI
distribution – DCF valuation
CBPI:
A fuel distributor operating
in Brazil, except Rio
Grande do Sul, Roraima
and Amapa
In
addition to the distribution
business, CBPI
also consolidates AM/PM,
IASA, and EMCA
totaling R$2.7 billion
TEV (refer to page 61)
| 2007E | 2008E | 2009E | 2010E | 2011E | 2012E | 2013E | 2014E | 2015E | 2016E |
Perp.
|
||||||||||||||||||||||||||||||||||
|
1.
EBIT
|
90
|
106
|
122
|
142
|
164
|
251
|
268
|
298
|
340
|
361
|
379
|
|||||||||||||||||||||||||||||||||
|
annual
growth
|
n.a.
|
18.3 | % | 14.7 | % | 16.5 | % | 15.7 | % | 52.6 | % | 6.9 | % | 11.0 | % | 14.1 | % | 6.3 | % | 5.1 | % | |||||||||||||||||||||||
|
(-)
tax
|
(23 | ) | (27 | ) | (31 | ) | (36 | ) | (42 | ) | (64 | ) | (69 | ) | (76 | ) | (87 | ) | (93 | ) | (97 | ) | ||||||||||||||||||||||
|
effective
tax rate
|
(25.6 | %) | (25.6 | %) | (25.6 | %) | (25.6 | %) | (25.6 | %) | (25.6 | %) | (25.6 | %) | (25.6 | %) | (25.6 | %) | (25.6 | %) | (25.6 | %) | ||||||||||||||||||||||
|
3.
EBIT (-) tax
|
67
|
79
|
91
|
106
|
122
|
187
|
200
|
222
|
253
|
269
|
282
|
|||||||||||||||||||||||||||||||||
|
(+)
Depreciation & Amortization
|
41
|
47
|
52
|
60
|
69
|
78
|
86
|
84
|
73
|
84
|
83
|
|||||||||||||||||||||||||||||||||
|
(-)
Capex, net of reimbursement
|
(74 | ) | (63 | ) | (91 | ) | (116 | ) | (134 | ) | (98 | ) | (105 | ) | (127 | ) | (144 | ) | (137 | ) | (130 | ) | ||||||||||||||||||||||
|
(-)
Changes in net operating working capital
|
(8 | ) | (46 | ) | (55 | ) | (58 | ) | (61 | ) | (37 | ) | (50 | ) | (51 | ) | (52 | ) | (59 | ) | (61 | ) | ||||||||||||||||||||||
|
4.
Free cash flow to the Firm
|
27
|
17
|
(3 | ) | (8 | ) | (4 | ) |
130
|
131
|
128
|
130
|
156
|
174
|
||||||||||||||||||||||||||||||
|
annual
growth
|
n.a.
|
(37.9 | %) | (120.4 | %) | 125.6 | % | (43.1 | %) |
n.a.
|
0.4 | % | (1.8 | %) | 1.1 | % | 20.1 | % | n.m. | |||||||||||||||||||||||||
| Note: Annual
free cash flow in US$ millions
Cash
flow in perpetuity reflects a
3% growth in sales volume compared to 2016 in line
with GDP’s 3% long-term
expected real growth. These assumptions were evaluated in due
diligence sessions confirmed by management of the businesses
and
consistent with expectations of long-term growth in
each
sector
|
||||||||||||||||||||||||||||||||||||||||||||
| Source: Based on company information, confirmed by Ipiranga management | ||||||||||||||||||||||||||||||||||||||||||||
TEV (R$ million) (R$ million) Perpetuity growth(a) (Gordon's growth model) (a) Values converted into Reais at 2.14 R$/US$. Net present value and perpetuity value calculated in US$ TEV/ 2007 EBITDA (R$ million) Perpetuity growth(a) (Gordon's growth model) (a) Values converted into Reais at 2.14 R$/US$. Net present value and perpetuity value calculated in US$ |
|
40
|
| Economic value of assets |
Section
3
|
Assumptions
–
CBPI
distribution
Selected
income statement drivers
Gas
and alcohol volumes
in the Brazilian market
were forecasted based
on a regression on
number of cars in Brazil
as a function of GDP
per capita, and consumption
per car
Diesel
volumes in the Brazilian
market were projected
as a result of a
regression on diesel volumes
in Brazil on GDP
growth
Assumes
the weighted average
contribution margin
of gasoline and ethanol
is constant in
real
Reais
5
CBPI
has the objective of increasing its
market share, which is deemed feasible by its management.
This assumption was
verified in a confirmatory due diligence session, and
corroborated by the fact
that CBPI gained 2 (two) percentage points of market
share between 2001 and
2005, according to the National Petroleum Agency, ANP.
However, the market
consultant indicated that in order to gain 2 (two) percentage
points market
share in the coming years, it would demand stronger capex
and higher marketing
expenses to support this growth. It is expected that
CBPI’s market share will
stabilize at 18.9% after 2012, when CBPI sales will grow
at the market pace,
around 8% per year. A scenario in which sales would grow
above this pace and
therefore resulting in further market share increase
would demand significant
investments and is inconsistent with the expected increasing
competition in the
long term, considering a market dominated by 5 main players
(which now control
about 70% of the market) and numerous other players
|
41
|
| Economic value of assets |
Section
3
|
Assumptions
–
CBPI
distribution
(continued)
Selected
income statement drivers
Revenue
increases driven
by market share and
gross margin per product
increases
EBITDA
margins in 2008-2011
are affected
by selling
expenses
relating to market
share growth, stabilized
from 2012-2016
|
42
|
| Economic value of underlying assets |
Section
3
|
Assumptions
–
CBPI
distribution
(continued)
Selected
income statement drivers
CBPI
will increase the number
of stations in its
network by approximately
3.2% per year
as a result of increased
volumes of fuel
and the increase in market
share by 200 basis
points
Selling
expenses increase
in 2007 through
2011 due to CBPI’s
strategy to increase
market share
|
43
|
| Economic value of underlying assets |
Section
3
|
Assumptions
–
CBPI
distribution
(continued)
Selected
balance sheet drivers
CAPEX
based on number
of new stores needed
to increase market
share as well as for
renovating existing stations
Based
on property, plant
and equipment depreciation
schedule
Net
operating working capital
assumptions are in
line with 2006
|
Change
in net operating working capital
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Net
operating working capital (R$
million)
|
2005A
|
2006A
|
2007E
|
2008E
|
2009E
|
2010E
|
2011E
|
2012E
|
2013E
|
2014E
|
2015E
|
2016E
|
||||||||||||||||||||||||||||||||||||||||
|
Net
operating working capital
|
671
|
872
|
889
|
992
|
1,119
|
1,253
|
1,399
|
1,487
|
1,608
|
1,734
|
1,863
|
2,015
|
||||||||||||||||||||||||||||||||||||||||
|
(+)
current assets
|
1,342
|
1,491
|
1,681
|
1,882
|
2,126
|
2,386
|
2,668
|
2,888
|
3,123
|
3,377
|
3,651
|
3,947
|
||||||||||||||||||||||||||||||||||||||||
|
(-)
current liabilities
|
671
|
618
|
792
|
890
|
1,007
|
1,133
|
1,270
|
1,401
|
1,515
|
1,644
|
1,788
|
1,931
|
||||||||||||||||||||||||||||||||||||||||
|
Change
in net operating working capital
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(Increase)
/ Decrease in net operating working capital
|
(17 | ) | (103 | ) | (127 | ) | (135 | ) | (145 | ) | (88 | ) | (122 | ) | (125 | ) | (130 | ) | (152 | ) | ||||||||||||||||||||||||||||||||
Source:
Based on
company information and an external consultant - José Magro, confirmed by
Ipiranga management
|
44
|
| Economic value of assets |
Section
3
|
Tab
D
Fuel distribution
- DPPI
|
45
|
| Economic value of assets |
Section
3
|
DPPI
distribution – DCF Valuation
DPPI:
A fuel distributor operating
in 2 states in the
South of Brazil
Isa-Sul,
a wholly owned subsidiary
of DPPI, owns
152 gas stations in
DPPI’s region. Isa-Sul
is valued based on DPPI’s
TEV multiple of 2006
EBITDA
Based
on 2006 figures, Isa-Sul
is valued at R$140
million (refer to pages 61 and 83)
DPPI
opco including Isa-Sul
is valued at R$706
million, or US$330
million (R$566 million related to DPPI ex-Isa Sul plus R$140 million
related to Isa-Sul)
|
2007E
|
2008E
|
2009E
|
2010E
|
2011E
|
2012E
|
2013E
|
2014E
|
2015E
|
2016E
|
Perp.
|
||||||||||||||||||||||||||||||||||
|
1.
EBIT
|
29
|
34
|
35
|
37
|
39
|
41
|
44
|
48
|
55
|
58
|
63
|
|||||||||||||||||||||||||||||||||
|
annual
growth
|
n.a.
|
14.3 | % | 4.5 | % | 6.5 | % | 4.6 | % | 5.3 | % | 5.5 | % | 11.2 | % | 13.6 | % | 4.8 | % | 9.2 | % | |||||||||||||||||||||||
|
(-)
tax
|
(7 | ) | (8 | ) | (8 | ) | (9 | ) | (9 | ) | (9 | ) | (10 | ) | (11 | ) | (13 | ) | (13 | ) | (14 | ) | ||||||||||||||||||||||
|
effective
tax rate
|
(22.8 | %) | (22.8 | %) | (22.8 | %) | (22.8 | %) | (22.8 | %) | (22.8 | %) | (22.8 | %) | (22.8 | %) | (22.8 | %) | (22.8 | %) | (22.8 | %) | ||||||||||||||||||||||
|
3.
EBIT (-) tax
|
23
|
26
|
27
|
29
|
30
|
32
|
34
|
37
|
42
|
44
|
49
|
|||||||||||||||||||||||||||||||||
|
(+)
Depreciation & Amortization
|
8
|
9
|
10
|
10
|
11
|
12
|
13
|
11
|
8
|
9
|
19
|
|||||||||||||||||||||||||||||||||
|
(-)
Capex
|
(15 | ) | (8 | ) | (6 | ) | (11 | ) | (8 | ) | (13 | ) | (12 | ) | (12 | ) | (12 | ) | (9 | ) | (19 | ) | ||||||||||||||||||||||
|
(-)
Changes in net operating working capital
|
(12 | ) | (13 | ) | (13 | ) | (12 | ) | (10 | ) | (11 | ) | (11 | ) | (12 | ) | (12 | ) | (13 | ) | (14 | ) | ||||||||||||||||||||||
|
4.
Free cash flow to the Firm
|
5
|
14
|
18
|
17
|
23
|
20
|
23
|
25
|
27
|
31
|
35
|
|||||||||||||||||||||||||||||||||
|
annual
growth
|
n.a.
|
199.4 | % | 28.0 | % | (6.2 | %) | 38.7 | % | (12.7 | %) | 14.0 | % | 6.4 | % | 7.7 | % | 18.4 | % | n.m. | ||||||||||||||||||||||||
|
Note:
|
Annual
free cash flow in US$ millions
Cash
flow in perpetuity reflects a
3% growth in sales volume compared to 2016 in line with GDP’s 3% long-term
expected real growth. These assumptions were evaluated in due
diligence sessions confirmed by management of the businesses
and
consistent with expectations of long-term growth in each
sector
|
|
Source:
|
Based
on company information, confirmed by Ipiranga
management
|
TEV (R$ million) (R$ million) Perpetuity growth(a) (Gordon's growth model) (a) Values converted into Reais at 2.14 R$/US$. Net present value and perpetuity value calculated in US$ TEV/ 2007 EBITDA (R$ million) Perpetuity growth(a) (Gordon's growth model) (a) Values converted into Reais at 2.14 R$/US$. Net present value and perpetuity value calculated in US$ |
|
46
|
| Economic value of assets |
Section
3
|
Assumptions
–
DPPI
distribution
Selected
income statement drivers
Gas
and
alcohol volumes in the Brazilian market were forecasted based on a
regression on
number of cars in Brazil as a function of GDP per capita, and consumption
per
car
Diesel
volumes in the Brazilian market were projected as a result of a regression
on
diesel volumes in Brazil on GDP growth
Given
its leadership
in the region, DPPI
presents little market
share fluctuation
DPPI’s
market share
remains approximately constant because DPPI is a leader in the region
in which
it operates – Rio Grande do Sul and Santa Catarina – with an already high 35%
(thirty-five percent) market share. Nationally, DPPI reduced its
market share
from 2.9% in 2001 to 2.6% in 2005 according to the National Petroleum
Agency –
ANP. As per the recommendation of the market consultant, which was
validated on
confirmatory due diligence session with DPPI’s management, DPPI would tend to
maintain its market share given DPPI’s dominant position in the region, or even
lose some market participation to competition in line with the company’s recent
performance.
|
47
|
| Economic value of assets |
Section
3
|
Assumptions
–
DPPI
distribution
(continued)
Selected
income statement drivers
Revenues
driven by volumes
and contribution
margin per product
Projected
EBITDA margin is expected to improve in relation to
2006
|
48
|
| Economic value of assets |
Section
3
|
Assumptions
–
DPPI
distribution
Selected
balance sheet drivers
CAPEX
based on the number
of new stores needed
to increase market
share as well as for
renovating existing stations
Based
on propery, plant and equipment depreciation schedule
Net
operating working capital
assumptions are in
line with 2006
|
Change
in net operating working capital
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Net
operating working capital (R$
million)
|
2005A | 2006A | 2007E | 2008E | 2009E | 2010E | 2011E | 2012E | 2013E | 2014E | 2015E | 2016E | ||||||||||||||||||||||||||||||||||||||||
|
Net
operating working capital
|
145
|
255
|
280
|
310
|
340
|
368
|
392
|
417
|
445
|
475
|
506
|
539
|
||||||||||||||||||||||||||||||||||||||||
|
(+)
current assets
|
232
|
310
|
338
|
375
|
412
|
446
|
474
|
505
|
539
|
575
|
613
|
653
|
||||||||||||||||||||||||||||||||||||||||
|
(-)
current liabilities
|
87
|
55
|
59
|
65
|
71
|
77
|
82
|
88
|
93
|
100
|
107
|
114
|
||||||||||||||||||||||||||||||||||||||||
|
Change
in net operating working capital
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(Increase)
/ Decrease in net operating working capital
|
(25 | ) | (30 | ) | (31 | ) | (28 | ) | (23 | ) | (26 | ) | (28 | ) | (29 | ) | (31 | ) | (33 | ) | ||||||||||||||||||||||||||||||||
|
Source:
|
Based
on
company information and an external consultant - José Magro,
confirmed by Ipiranga management
|
|
49
|
| Economic value of assets |
Section
3
|
Tab
E
Copesul
|
50
|
| Economic value of assets |
Section
3
|
Copesul
– DCF valuation
Copesul
is a naphtha-based cracker
jointly controlled
by Ipiranga (29.5%)
and Braskem (29.5%)
2006
production consisted
of 39% ethylene,
20% propylene,
10% benzene,
and 31% other
by-products
|
2007E
|
2008E
|
2009E
|
2010E
|
2011E
|
2012E
|
2013E
|
2014E
|
2015E
|
2016E
|
Perp.
|
||||||||||||||||||||||||||||||||||
|
1.
EBIT
|
402
|
294
|
273
|
228
|
231
|
315
|
365
|
454
|
521
|
488
|
374
|
|||||||||||||||||||||||||||||||||
|
annual
growth
|
(3.6 | %) | (26.9 | %) | (6.9 | %) | (16.5 | %) | 1.1 | % | 36.6 | % | 15.6 | % | 24.6 | % | 14.6 | % | (6.4 | %) | 2.0 | % | ||||||||||||||||||||||
|
(-)
tax
|
(132 | ) | (96 | ) | (90 | ) | (75 | ) | (76 | ) | (103 | ) | (119 | ) | (149 | ) | (171 | ) | (160 | ) | (122 | ) | ||||||||||||||||||||||
|
effective
tax rate
|
(32.8 | %) | (32.8 | %) | (32.8 | %) | (32.8 | %) | (32.8 | %) | (32.8 | %) | (32.8 | %) | (32.8 | %) | (32.8 | %) | (32.8 | %) | (32.8 | %) | ||||||||||||||||||||||
|
3.
EBIT (-) tax
|
270
|
198
|
184
|
154
|
155
|
212
|
245
|
306
|
350
|
328
|
251
|
|||||||||||||||||||||||||||||||||
|
(+)
Depreciation & Amortization
|
109
|
107
|
105
|
105
|
45
|
8
|
9
|
11
|
12
|
13
|
31
|
|||||||||||||||||||||||||||||||||
|
(-)
Capex
|
(26 | ) | (26 | ) | (27 | ) | (27 | ) | (28 | ) | (28 | ) | (29 | ) | (29 | ) | (30 | ) | (30 | ) | (31 | ) | ||||||||||||||||||||||
|
(-)
Changes in net operating working capital
|
24
|
41
|
4
|
17
|
(5 | ) | (42 | ) | (26 | ) | (45 | ) | (35 | ) |
10
|
0
|
||||||||||||||||||||||||||||
|
4.
Free cash flow to the Firm
|
378
|
319
|
266
|
248
|
169
|
150
|
199
|
242
|
297
|
321
|
251
|
|||||||||||||||||||||||||||||||||
|
annual growth
|
n.a.
|
(15.5 | %) | (16.6 | %) | (6.6 | %) | (32.2 | %) | (11.2 | %) | 33.1 | % | 21.3 | % | 23.0 | % | 7.9 | % | n.m. | ||||||||||||||||||||||||
|
Note:
|
Annual
free cash flow in US$ millions
|
|
Source:
|
Based
on company information, confirmed by Ipiranga
management
|
TEV (R$ million)
----------------
(a) Values converted into Reais at 2.14 R$/US$. Net present
value and perpetuity value calculated in US$
Source: Based on company information, confirmed by Ipiranga
management
TEV/Normalized EBITDA
---------------------
Note: EBITDA normalized for the industry cycle
(a) Values converted into Reais at 2.14 R$/US$. Net present
value and perpetuity value calculated in US$
Source: Based on company information, confirmed by Ipiranga
management
|
|
51
|
| Economic value of assets |
Section
3
|
Assumptions
– Copesul
Selected
income statement drivers
Volumes
remain constant
at 2006 levels
Gross
margin was driven
by ethylene, propylene,
and benzene cash
spreads based on CMAI
data adjusted for Brazil
|
52
|
| Economic value of assets |
Section
3
|
Assumptions
–
Copesul
(continued)
Selected
income statement drivers
Revenues
projected as a
constant spread to gross
margin
EBITDA
margins reflect the
ethylene business cycle,
based on CMAI data
|
53
|
| Economic value of assets |
Section
3
|
Assumptions
–
Copesul
(continued)
Selected
balance sheet drivers
Maintenance
CAPEX projected
based on company,
information confirmed by management
Based
on property, plant and equipment depreciation schedule
Net
operating working capital
assumptions are in
line with 2006
|
Change
in net operating working capital
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net operating working capital (R$ million) |
2005A
|
2006A
|
2007E
|
2008E
|
2009E
|
2010E
|
2011E
|
2012E
|
2013E
|
2014E
|
2015E
|
2016E
|
||||||||||||||||||||||||||||||||||||||||
|
Net
operating working capital
|
459
|
557
|
506
|
414
|
406
|
366
|
377
|
478
|
543
|
655
|
744
|
719
|
||||||||||||||||||||||||||||||||||||||||
|
(+)
current assets
|
795
|
1,061
|
982
|
795
|
776
|
694
|
714
|
917
|
1,046
|
1,272
|
1,450
|
1,398
|
||||||||||||||||||||||||||||||||||||||||
|
(-)
current liabilities
|
336
|
504
|
476
|
380
|
370
|
328
|
337
|
439
|
503
|
617
|
706
|
678
|
||||||||||||||||||||||||||||||||||||||||
|
Change
in net operating working capital
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(Increase)
/ Decrease in net operating working capital
|
51
|
92
|
8
|
40
|
(11 | ) | (101 | ) | (65 | ) | (112 | ) | (89 | ) |
25
|
|||||||||||||||||||||||||||||||||||||
Source:
Based on company information, confirmed by Ipiranga
management
|
54
|
| Economic value of assets |
Section
3
|
Tab
F
IPQ
|
55
|
| Economic value of assets |
Section
3
|
IPQ
- DCF valuation
IPQ
is a
2nd generation producer of high-end petrochemicals
In 2006, volume sold reached 638,000 tons
|
|
|
2007E
|
2008E
|
2009E
|
2010E
|
2011E
|
2012E
|
2013E
|
2014E
|
2015E
|
2016E
|
Perp.
|
||||||||||||||||||||||
|
1.
EBIT
|
87
|
89
|
86
|
73
|
83
|
79
|
86
|
96
|
106
|
104
|
80
|
|||||||||||||||||||||||
|
annual
growth
|
n.a.
|
2.2
|
%
|
(3.2
|
%)
|
(15.9
|
%)
|
14.2
|
%
|
(4.7
|
%)
|
8.8
|
%
|
12.2
|
%
|
10.5
|
%
|
(2.7
|
%)
|
2.0
|
%
|
|||||||||||||
|
(-)
tax
|
(22
|
)
|
(22
|
)
|
(22
|
)
|
(18
|
)
|
(21
|
)
|
(20
|
)
|
(21
|
)
|
(24
|
)
|
(27
|
)
|
(26
|
)
|
(20
|
)
|
||||||||||||
|
effective
tax rate
|
(25.0
|
%)
|
(25.0
|
%)
|
(25.0
|
%)
|
(25.0
|
%)
|
(25.0
|
%)
|
(25.0
|
%)
|
(25.0
|
%)
|
(25.0
|
%)
|
(25.0
|
%)
|
(25.0
|
%)
|
(25.0
|
%)
|
||||||||||||
|
3.
EBIT (-) tax
|
65
|
67
|
65
|
54
|
62
|
59
|
64
|
72
|
80
|
78
|
60
|
|||||||||||||||||||||||
|
(+)
Depreciation & Amortization
|
15
|
15
|
15
|
15
|
15
|
16
|
16
|
16
|
16
|
16
|
17
|
|||||||||||||||||||||||
|
(-)
Capex
|
(5
|
)
|
(5
|
)
|
(5
|
)
|
(6
|
)
|
(6
|
)
|
(6
|
)
|
(6
|
)
|
(6
|
)
|
(6
|
)
|
(6
|
)
|
(17
|
)
|
||||||||||||
|
(-)
Changes in net operating working capital
|
15
|
(0
|
)
|
0
|
(1
|
)
|
1
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
1
|
(1
|
)
|
0
|
|||||||||||||||||
|
4.
Free cash flow to the Firm
|
90
|
77
|
75
|
63
|
73
|
68
|
74
|
82
|
91
|
87
|
60
|
|||||||||||||||||||||||
|
annual
growth
|
n.a.
|
(15.2
|
%)
|
(2.3
|
%)
|
(15.5
|
%)
|
14.9
|
%
|
(6.4
|
%)
|
8.6
|
%
|
10.5
|
%
|
11.1
|
%
|
(3.9
|
%)
|
n.m.
|
|
Note:
Annual free cash flow in US$ millions
Source:
Based on company information, confirmed by Ipiranga management
TEV (R$ million) (R$ million) Perpetuity growth(a) (Gordon's growth model) (a) Values converted into Reais at 2.14 R$/US$. Net present value and perpetuity value calculated in US$ TEV/ Average EBITDA (R$ million) Perpetuity growth(a) (Gordon's growth model) (a) Values converted into Reais at 2.14 R$/US$. Net present value and perpetuity value calculated in US$ |
|
56
|
| Economic value of assets |
Section
3
|
Assumptions
- IPQ
Selected
income statement drivers
Volumes
remain flat at 600 thousand tons based on company information confirmed
by
Ipiranga management
Gross
margin is based on cash spreads of Polyethylene and Polypropylene
based on
adjusted CMAI forecasts
|
57
|
| Economic value of assets |
Section
3
|
Assumptions
- IPQ (continued)
Selected
balance sheet drivers
CMAI
price forecasts for Polyethylene
and Polypropylene
in US Dollars
|
58
|
| Economic value of assets |
Section
3
|
Assumptions
- IPQ (continued)
Selected
balance sheet drivers
Maintenance
CAPEX projected based on company information, confirmed by Ipiranga
management
Based
on property, plant and equipment depreciation schedule
Net
operating working capital assumptions are in line with
2006
|
Change
in net operating working capital
|
|||||||||||||||||||||||||||||||||||||
| Net operating working capital (R$ million) | 2005A | 2006A | 2007E | 2008E | 2009E | 2010E | 2011E | 2012E | 2013E | 2014E | 2015E | 2016E | |||||||||||||||||||||||||
|
Net
operating working capital
|
(36
|
)
|
68
|
36
|
36 |
36
|
38
|
37
|
40
|
41
|
43
|
41
|
43
|
||||||||||||||||||||||||
|
(+)
current assets
|
409
|
619
|
517
|
522 |
474
|
438
|
437
|
462
|
509
|
588
|
570
|
564
|
|||||||||||||||||||||||||
|
(-)
current liabilities
|
445
|
551
|
481
|
486 |
439
|
400
|
400
|
422
|
468
|
545
|
529
|
522
|
|||||||||||||||||||||||||
|
Change
in net operating working capital
|
|||||||||||||||||||||||||||||||||||||
|
(Increase)
/ Decrease in net operating working capital
|
32
|
(0
|
)
|
1
|
(3
|
)
|
1
|
(3
|
)
|
(1
|
)
|
(2
|
)
|
2
|
(2
|
)
|
|||||||||||||||||||||
|
Source:
Based on company information, confirmed by Ipiranga
management
|
|||||||||||||||||||||||||||||||||||||
|
59
|
| Economic value of assets |
Section
3
|
Tab
G
Valuation
of other assets based on multiples
|
60
|
| Economic value of assets |
Section
3
|
Valuation
summary - Other
|
|
TEV/’06
|
|||||
|
Company
|
Description
|
TEV
(R$mm)
|
EBITDA
|
|||
|
n
|
The
business has operated on a break even basis (sometimes
given
|
|||||
|
Refinaria
de Petróleo Ipiranga
|
special
tax incentives by the State)
|
9
|
6.5x
|
|||
|
(RIPI)
|
(pg.
77)
|
|||||
|
n
|
Valuation
based on comparable trading companies detailed on page
77
|
|||||
|
n
|
A
chemical products distributor with over 5,000 clients in
50
different
|
|||||
|
Ipiranga
Química S.A. (IQ)
|
|
markets
|
176
|
8.6x
|
||
|
(pg.
76)
|
||||||
|
n
|
Valuation
based on precedent transactions detailed on page 76
|
|||||
|
n
|
A
producer of specialty petrochemicals; consolidated by CBPI
SA
|
|||||
|
Empresa
Carioca de Produtos
|
n
|
Valuation
based on comparable trading companies
|
18
|
6.3x
|
||
|
Químicos
S.A. (EMCA)
|
(pg.
75)
|
|||||
|
|
n
|
Comparable
sample includes both specialty and commodity
|
||||
|
|
petrochemical
trading companies detailed on page 75
|
|||||
|
n
|
A
producer of asphalt and pavement surface products
|
|||||
|
Ipiranga
Asfaltos (IASA)
|
89
|
6.8x
|
||||
|
n
|
Valuation
based on precedent transactions detailed on page 77
|
(pg.
77)
|
||||
|
n
|
A
retail convenience store chain attached to DPPI and CBPI
gas
stations,
|
|||||
|
AM/PM
Comestíveis
|
|
consolidated
by CBPI
|
236
|
7.5x
|
||
|
(pg.
76)
|
||||||
|
n
|
Valuation
based on comparable trading companies detailed on page
76
|
|||||
|
n
|
A
subsidiary that owns 152 and operates 15 of the gas stations
in
DPPI’s
|
|||||
|
Isa-Sul
Administração e Part. Ltda.
|
|
region
|
140
|
8.8x
|
||
|
(pg.
83)
|
||||||
|
n
|
Valuation
based on the same multiple as DPPI implied
by the DCF as described on
note (1) below
|
|
Note:
All valuation based on the median of the sample of multiples
of comparable
companies applied to metrics in US dollars, unless otherwise
noted
|
|
Valuation
was
estimated based on EBITDA multiples given that EBITDA
is a proxy for cash
flow generation. The use of EBITDA as a value driver
has the advantage of
taking into consideration profitability combined with
mitigating the
impact of financial leverage
(1)
8.8x=US$265 million/US$ 30 million; equivalent to TEV
of DPPI (ex-Isa Sul)
in US dollars divided by EBITDA of DPPI (ex- Isa Sul)
in 2006 in US
dollars
|
Source:
Company information and Wall Street Research
|
61
|
|
Final
considerations
|
Section
4
|
Section
4
Final
considerations
|
62
|
| Final considerations |
Section
4
|
Share
price range
Share
price range based on the economic value (R$ per share)
|
-5%
|
Mid-range
|
+5%
|
||||
|
CBPI
|
26.97
|
28.39
|
29.81
|
|||
|
DPPI
|
41.11
|
43.28
|
45.44
|
|||
|
RIPI
|
51.63
|
54.35
|
57.06
|
|||
|
Ultrapar
|
64.48
|
67.87
|
71.26
|
Note:
10%
range in compliance with the CVM Resolution #361/02.
|
63
|
| Glossary |
Section
5
|
Section
5
Glossary
|
64
|
| Glossary |
Section
5
|
|
n
|
Beta:
beta against the S&P500, a measure of systemic
risk
|
|
n
|
Capital
Asset Pricing Model (CAPM): methodology used to define the cost
of equity
|
|
n
|
Capex:
Capital Expenditures
|
|
n
|
Cost
of Equity (Ke): return required by the equity
holder
|
|
n
|
Cost
of debt(Kd): cost of third party
financing
|
|
n
|
CVM:
Comissão de Valores Mobiliários
|
|
n
|
D&A:
depreciation and amortization
|
|
n
|
Net
debt: Cash and cash equivalents, net position in derivatives,
export notes, short and long-term bank loans, receivable and
payable
dividends, short and long-term receivables and payables related
to
debentures, short and long-term pension funds deficits, provisions,
and
other receivables and payables to related parties, including
subscription
bonus (“bônus
de subscrição”)
|
|
n
|
Drivers:
value drivers or key drivers
|
|
n
|
EBIT:
Earnings Before Interests and Taxes
|
|
n
|
EBITDA:
Earnings Before Interest, Taxes, Depreciation and
Amortization
|
|
n
|
EMBI:
Emerging Markets Bond Index – Brazil is a proxi for the Brazilian
sovereign debt yield curve. The EMBI-Brazil accounts for the
weighted
average premium of the Brazilian sovereign bonds to the US Treasury,
which
risk is perceived as practically zero (source: O Estado de São
Paulo)
|
|
n
|
EV
or
TEV: Enterprise value
|
|
n
|
Equity
value: TEV minus net debt
|
|
n
|
Dollar:
American Dollar
|
|
n
|
DCF:
Discounted cash flow
|
|
n
|
FCFF:
Free Cash Flow to Firm
|
|
n
|
Operating
cash flow: relates to cash inflows and outflows solely related
to
the operations
|
|
n
|
Free
float: percentage of shares in circulation of the total capital
of the company
|
|
65
|
| Glossary |
Section
5
|
|
n
|
JCP:
interest on capital (“Juros sobre Capital
Próprio”)
|
|
n
|
LTM:
Last twelve months
|
|
n
|
Gross
income: Total revenue, excluding deductions
from sales and costs
of production
|
|
n
|
IPCA:
consumer price index
|
|
n
|
NOPLAT:
Net Operating Profit Less Adjusted
Taxes
|
|
n
|
ON:
“Ação Ordinária” ordinary or voting
share
|
|
n
|
PN:
“Ação Preferencial” preferred or non-voting
share
|
|
n
|
GDP:
Gross Domestic Product defined as goods and services
produced in a country
excluding expenses utilized in the process of
production during a year. A
method of measuring the total value generated
by all economic
activities
|
|
n
|
Nominal
GDP is GDP in nominal terms, including
inflation. Real
GDP is GDP in constant dollars in which
the growth rate excludes
inflation
|
|
n
|
ERP:
equity risk premium is the expected
premium for investing in
stocks
|
|
n
|
CRP:
country risk premium is the expected
premium for investing in a
certain specific country
|
|
n
|
Spread:
price or yield differential
|
|
n
|
“Tag-along”:
(minority) shareholders right to join a transaction
in which another
shareholder (usually controlling shareholder)
is selling their stake. In
Brazil, the legislation specifies that voting
shareholders of public
entities have the right to receive a minimum
offer of 80% the price to be
paid for control (the 80% tag-along
right)
|
|
66
|
| Glossary |
Section
5
|
|
n
|
Terminal
value: value of the company at the end of
the
projection
|
|
n
|
Total
Enterprise Value (TEV): Total value of the company calculated
based on economic value of shareholders’ equity plus net
debt
|
|
n
|
Risk
free rate: US Treasury
|
|
n
|
Return
on Capital ("ROC"): = growth rate divided by reinvestment
rate
|
|
n
|
Reinvestment
rate: = (Capex-Depreciation plus Change
in non-cash working
capital) devided by (EBIT x (1-tax
rate)
|
|
n
|
VP:
Present value
|
|
n
|
WACC:
Weighted Average Cost of Capital
|
|
67
|
| Share price evolution |
Appendix
I
|
Appendix
I
Share
price evolution
|
68
|
| Share price evolution |
Appendix
I
|
Weighted
average share prices - 3/17/06 - 3/17/07
Ultrapar
(Share
price in R$, Volume in ‘000’s)
|
Month
|
PN
Price
|
Volume
|
||
|
March-06(a)
|
38.27
|
676
|
||
|
April-06
|
36.41
|
990
|
||
|
May-06
|
36.99
|
1,078
|
||
|
June-06
|
34.49
|
1,511
|
||
|
July-06
|
33.88
|
1,159
|
||
|
August-06
|
35.51
|
1,503
|
||
|
September-06
|
38.48
|
905
|
||
|
October-06
|
40.40
|
1,296
|
||
|
November-06
|
47.58
|
1,702
|
||
|
December-06
|
47.75
|
1,088
|
||
|
January-07
|
51.07
|
1,938
|
||
|
February-07
|
53.02
|
2,530
|
||
|
March-07(b)
|
50.78
|
733
|
||
|
WA
share price
|
R$43.1
|
Notes: (a)
March
17, 2006, to March 31, 2006 (15 days)
(b) March 1, 2007, to March16, 2007 (16 days)
(b) March 1, 2007, to March16, 2007 (16 days)
Source:
FactSet
CBPI
(Share
price in R$, Volume in ‘000’s)
|
Month
|
PN
Price
|
Volume
|
ON
Price
|
Volume
|
||||
|
March-06(a)
|
15.65
|
3,401
|
20.00
|
6
|
||||
|
April-06
|
17.94
|
6,389
|
20.75
|
16
|
||||
|
May-06
|
17.84
|
5,933
|
21.83
|
3
|
||||
|
June-06
|
17.48
|
5,717
|
20.63
|
7
|
||||
|
July-06
|
17.02
|
5,001
|
21.83
|
4
|
||||
|
August-06
|
17.30
|
6,600
|
24.12
|
0
|
||||
|
September-06
|
17.28
|
4,821
|
21.11
|
3
|
||||
|
October-06
|
18.78
|
4,459
|
21.29
|
24
|
||||
|
November-06
|
18.56
|
4,189
|
21.67
|
17
|
||||
|
December-06
|
18.96
|
4,221
|
21.93
|
23
|
||||
|
January-07
|
19.18
|
4,891
|
22.22
|
12
|
||||
|
February-07
|
22.28
|
3,579
|
26.04
|
7
|
||||
|
March-07(b)
|
22.36
|
3,322
|
27.87
|
1
|
||||
|
WA
share price
|
R$18.3
|
R$21.7
|
Notes: (a)
March
17, 2006, to March 31, 2006 (15 days)
(b)
March 1, 2007, to March 16, 2007 (16 days)
Source:
FactSet
RIPI
(Share
price in R$, Volume in ‘000’s)
|
Month
|
PN
Price
|
Volume
|
ON
Price
|
Volume
|
||||
|
March-06(a)
|
23.61
|
84
|
39.05
|
83
|
||||
|
April-06
|
24.96
|
665
|
35.83
|
123
|
||||
|
May-06
|
28.95
|
1,134
|
36.52
|
266
|
||||
|
June-06
|
30.59
|
425
|
36.99
|
144
|
||||
|
July-06
|
30.10
|
323
|
36.21
|
72
|
||||
|
August-06
|
31.22
|
497
|
37.35
|
166
|
||||
|
September-06
|
33.17
|
415
|
38.45
|
56
|
||||
|
October-06
|
35.80
|
437
|
39.69
|
95
|
||||
|
November-06
|
37.01
|
353
|
41.51
|
139
|
||||
|
December-06
|
37.36
|
289
|
42.56
|
93
|
||||
|
January-07
|
37.44
|
568
|
43.72
|
95
|
||||
|
February-07
|
40.63
|
371
|
50.00
|
141
|
||||
|
March-07(b)
|
42.54
|
292
|
70.48
|
370
|
||||
|
WA
share price
|
R$32.7
|
R$45.8
|
Notes: (a)
March
17, 2006, to March 31, 2006 (15 days)
(b) March 1, 2007, to March 16, 2007 (16 days)
Source:
FactSet
DPPI
(Share
price in R$, Volume in ‘000’s)
|
Month
|
PN
Price
|
Volume
|
ON
Price
|
Volume
|
||||
|
March-06(a)
|
23.03
|
38
|
39.00
|
2
|
||||
|
April-06
|
24.01
|
251
|
42.47
|
2
|
||||
|
May-06
|
25.12
|
185
|
38.05
|
2
|
||||
|
June-06
|
24.02
|
398
|
42.92
|
1
|
||||
|
July-06
|
24.09
|
113
|
35.74
|
2
|
||||
|
August-06
|
23.20
|
261
|
32.25
|
2
|
||||
|
September-06
|
23.09
|
115
|
36.54
|
0
|
||||
|
October-06
|
23.08
|
318
|
30.20
|
2
|
||||
|
November-06
|
23.71
|
460
|
27.71
|
1
|
||||
|
December-06
|
25.54
|
316
|
28.69
|
2
|
||||
|
January-07
|
27.98
|
239
|
30.00
|
1
|
||||
|
February-07
|
32.70
|
138
|
35.00
|
0
|
||||
|
March-07(b)
|
33.08
|
87
|
55.96
|
8
|
||||
|
WA
share price
|
R$25.0
|
R$41.7
|
Notes: (a)
March
17, 2006, to March 31, 2006 (15 days)
(b)
March 1, 2007, to March 16, 2007 (16 days)
Source:
FactSet
|
69
|
| Share price evolution |
Appendix
I
|
Ultrapar
LTM ending 3/16/2007
--------------------
ON - R$ PN - R$
------- -------
Max N.A 56.95
W.A. N.A 43.08
Min N.A 31.77
-----------------------------
Note: R$ per share
Source: Factset
3/16/2007 to 4/2/2007
---------------------
ON - R$ PN - R$
------- -------
Max N.A 63.75
W.A. N.A 56.10
Min N.A 49.29
-----------------------------
Note: R$ per share
Source: Factset
|
|
70
|
| Share price evolution |
Appendix
I
|
RIPI
LTM ending 3/16/2007
--------------------
ON - R$ PN - R$
------- -------
Max 80.15 45.70
W.A. 45.81 32.75
Min 34.00 22.55
-----------------------------
Note: R$ per share
Source: Factset
3/16/2007 to 4/2/2007
---------------------
ON - R$ PN - R$
------- -------
Max 97.68 47.50
W.A. 91.57 44.85
Min 80.15 41.51
-----------------------------
Note: R$ per share
Source: Factset
|
|
71
|
| Share price evolution |
Appendix
I
|
CBPI
LTM ending 3/16/2007
--------------------
ON - R$ PN - R$
------- -------
Max 30.80 23.88
W.A. 21.72 18.32
Min 20.00 14.58
-----------------------------
Note: R$ per share
Source: Factset
3/16/2007 to 4/2/2007
---------------------
ON - R$ PN - R$
------- -------
Max 53.50 25.30
W.A. 52.55 23.28
Min 30.80 22.10
-----------------------------
Note: R$ per share
Source: Factset
|
|
72
|
| Share price evolution |
Appendix
I
|
DPPI
LTM ending 3/16/2007
--------------------
ON - R$ PN - R$
------- -------
Max 60.00 34.99
W.A. 41.69 24.99
Min 27.50 22.00
-----------------------------
Note: R$ per share
Source: Factset
3/16/2007 to 4/2/2007
---------------------
ON - R$ PN - R$
------- -------
Max 102.02 38.98
W.A. 96.53 34.69
Min 60.00 33.00
-----------------------------
Note: R$ per share
Source: Factset
|
|
73
|
| Comparable multiples |
Appendix
II
|
Because
there is no company that is directly comparable to EMCA, we judge that
the
multiples based on a sample of companies that included commodity and specialty
chemical companies, consistent with the business model of EMCA, its margins,
and
its expected growth, would be an adequate parameter for
valuation
Appendix
II
Comparable
multiples
|
74
|
| Comparable multiples |
Appendix
II
|
|
Comparable
public company analysis - Commodities and specialty
chemicals
|
||||||||||||||
|
|
|
|
|
|
TEV
/
EBITDA
|
|
|
|||||||
| Company name |
|
|
|
|
|
|
|
|
|
|
|
|||
| Commodities | ||||||||||||||
|
Nova
|
$29.70
|
$2,477
|
$4,208
|
6.2x
|
5.2x
|
0.6x
|
0.7x
|
|||||||
|
BASF
|
$100.83
|
50,506
|
65,198
|
4.9x
|
4.9x
|
0.9x
|
0.9x
|
|||||||
|
Westlake
|
$27.32
|
1,784
|
1,992
|
4.9x
|
5.1x
|
0.8x
|
0.7x
|
|||||||
|
Dow
|
$43.38
|
41,949
|
49,950
|
6.4x
|
6.4x
|
1.0x
|
1.0x
|
|||||||
|
Lyondell
PF(pigments sale)
|
$30.40
|
7,664
|
14,714
|
4.7x
|
4.9x
|
0.6x
|
0.6x
|
|||||||
|
Braskem
|
$6.46
|
2,332
|
4,484
|
5.7x
|
5.6x
|
0.8x
|
0.9x
|
|||||||
|
Suzano
Petroquimica
|
$2.16
|
488
|
1,220
|
n.a.
|
6.4x
|
1.1x
|
0.9x
|
|||||||
|
Petroquimica
União
|
$4.94
|
518
|
716
|
5.2x
|
6.6x
|
0.5x
|
0.5x
|
|||||||
|
Mean
- commodities
|
5.5x
|
5.6x
|
0.8x
|
|
||||||||||
|
Median
- commodities
|
5.2x
|
5.4x
|
0.8x
|
|
||||||||||
|
Maximum
- commodities
|
6.4x
|
6.6x
|
1.1x
|
|
||||||||||
|
Minimum
- commodities
|
4.7x
|
4.9x
|
0.5x
|
|
||||||||||
| Specialty chemicals | ||||||||||||||
|
Clariant
|
$16.05
|
$3,637
|
$4,973
|
6.9x
|
6.8x
|
0.7x
|
|
|||||||
|
Rhodia
|
$3.50
|
4,220
|
6,794
|
7.1x
|
6.7x
|
1.1x
|
|
|||||||
|
Lubrizol
|
$51.10
|
3,601
|
4,665
|
8.2x
|
7.7x
|
1.2x
|
|
|||||||
|
Huntsman
|
$18.94
|
4,433
|
7,432
|
7.7x
|
6.4x
|
0.8x
|
|
|||||||
|
Celanese
|
$30.40
|
5,288
|
7,619
|
6.6x
|
6.8x
|
1.3x
|
|
|||||||
|
Mean
- specialties
|
7.3x
|
6.9x
|
1.0x
|
|
||||||||||
|
Median
- specialties
|
7.1x
|
6.8x
|
1.1x
|
|
||||||||||
|
Maximum
- specialties
|
8.2x
|
7.7x
|
1.3x
|
|
||||||||||
|
Minimum
- specialties
|
6.6x
|
6.4x
|
0.7x
|
|
| Median - Commodities & Specialties |
6.3x
|
6.4x
|
0.8x
|
0.9x
|
Notes: All figures in US$ million unless otherwise noted
Source:
Companies information, FactSet and Bloomberg
|
75
|
| Comparable multiples |
Appendix
II
|
Selected
comparable multiples - Chemical distributors & Retail Brazil
Ipiranga
Química was valued based on a EBITDA multiple of precedent transactions that
involved the sale of distributors of chemical
products
|
Precedent
transaction analysis - Chemical distributors
|
|
TEV/LTM
|
LTM
Metric
|
|||||||
| Target - Buyer |
Date
|
TEV
|
EBITDA
|
EBITDA
|
||||
|
ChemCentral
- Univar
|
Mar-07
|
$650
|
9.3x
|
|
||||
|
INT
Muellor Chemical - NIB Capital
|
Jun-01
|
228
|
8.8x
|
|
||||
|
HCI
- Brenntag
|
Nov-00
|
|
306
|
8.5x
|
|
|||
|
Ellis
& Everard - Vopak Distribution
|
Jan-01
|
480
|
6.1x
|
|
||||
|
Mean
|
|
|||||||
|
Median
|
|
|||||||
|
Max
|
|
|||||||
|
Min
|
|
Notes:
All figures in US$ million unless otherwise noted.
Source:
Companies information, FactSet and Bloomberg.
Among
the
companies listed in the local market, CBD is the one with a profile that
most
closely mirrors AM/PM7
|
Comparable
public company analysis -
Retail Brazil
|
|
Market
|
TEV
/
EBITDA
|
|||||||||
| Company name |
Cap.
|
TEV
|
2006A
|
2007E
|
||||||
|
Pao
de Acucar - CBD
|
|
$4,042
|
$4,687
|
7.5x
|
5.8x
|
|||||
Notes:
All figures in US$ million unless otherwise noted.
Source:
Companies information, FactSet and Bloomberg.
7
Sales
of CBD and AM/PM are primarily
foods and consumer goods (foods and perishables exceeds 70% of CBD sales).
In
the last 5 years, CBD’s average sales growth was 11.4% and EBITDA growth was
12.0%
|
76
|
| Comparable multiples |
Appendix
II
|
Selected
comparable multiples - Refiners and Asphalt producers
Alon,
Delek, and Frontier are the companies that best mirror the business of
Refinaria
(RIPI Opco) and served as a valuation benchmark
|
Comparable
public company analysis -
Refiners
|
|
Share
price
|
Market
|
TEV
/
EBITDA
|
Price
to earnings
|
|||||||||||||||
| Company |
3/23/2007
|
Cap
|
TEV
|
2006A
|
2007E
|
2008E
|
2006A
|
2007E
|
2008E
|
|||||||||
|
Alon
USA
|
$36.30
|
$1,699
|
$2,175
|
8.7x
|
6.6x
|
8.4x
|
14.4x
|
10.6x
|
13.4x
|
|||||||||
|
Delek
US Holdings
|
18.77
|
973
|
1,158
|
6.5
|
6.4
|
6.3
|
9.7
|
10.4
|
11.1
|
|||||||||
|
Frontier
Oil
|
33.08
|
3,628
|
3,372
|
5.5
|
6.3
|
6.3
|
9.8
|
11.9
|
12.9
|
|||||||||
|
Average
|
6.9
|
6.5
|
7.0
|
11.3
|
11.0
|
12.5
|
||||||||||||
|
Median
|
6.5
|
6.4
|
6.3
|
9.8
|
10.6
|
12.9
|
||||||||||||
|
Max
|
8.7
|
6.6
|
8.4
|
14.4
|
11.9
|
13.4
|
||||||||||||
|
Min
|
5.5
|
6.3
|
6.3
|
9.7
|
10.4
|
11.1
|
||||||||||||
Notes:
All figures in US$ million unless otherwise noted.
Market
Cap. includes options and in-the-money convertibles.
Source:
Companies information, FactSet and Bloomberg.
IASA
valuation was driven by precedent transactions that involved the sale of
asphalt
producers
|
Precedent
transaction analysis - Asphalt producers
|
|
TEV
/
|
TEV
/
|
|||||||
| Target / Buyer |
Date
|
TEV
|
LTM
EBITDA
|
LTM
Sales
|
||||
|
Frehner
Construction / Aggregate Industries
|
5/11/2004
|
95.8
|
NA
|
0.6x
|
||||
|
Better
Materials Corp. / Hanson Building Materials
|
7/18/2003
|
155
|
7.3x
|
1.3x
|
||||
|
S.E.
Johnson / CRH plc
|
5/16/2003
|
177
|
6.3x
|
0.7x
|
||||
|
Kiew
it Materials / CSR
|
10/2/2002
|
648
|
8.8x
|
1.3x
|
||||
|
Mount
Hope Rock Products / CRH plc
|
4/30/2001
|
138
|
7.3x
|
1.3x
|
||||
|
Northern
Ohio Paving and Dolomite Group / CRH plc
|
6/21/2000
|
172
|
5.9x
|
1.3x
|
||||
|
The
Shelly Company / CRH plc
|
2/24/2000
|
362
|
5.7x
|
1.1x
|
||||
|
Thompson-McCully
/ CRH plc
|
7/12/1999
|
422
|
8.0x
|
1.7x
|
||||
|
Dell
Contractors and Millington Quarry / CRH plc
|
7/5/1999
|
146
|
5.6x
|
1.0x
|
||||
|
MA
Segale - Icon Materials / CRH plc
|
5/1/1998
|
60
|
NA
|
1.2x
|
||||
|
Mean
|
6.9x
|
1.1x
|
||||||
|
Median
|
6.8x
|
1.2x
|
||||||
|
Max
|
8.8x
|
1.7x
|
||||||
|
Min
|
5.6x
|
0.6x
|
Notes:
All figures in US$ million unless otherwise noted.
CRH
plc was previously known as Oldcastle Materials
Source:
Companies information, FactSet and Bloomberg.
|
77
|
| Overview of the industries in which the assessed companies operate |
Appendix
III
|
Appendix
III
Overview
of the industries in which the assessed companies operate
|
78
|
| Overview of the industries in which the assessed companies operate |
Appendix
III
|
Brazilian fuel
distribution industry
Ipiranga
and Petrobras (BR) are the leading players in the Brazilian fuel distribution
market
Changes
in
the regulatory framework benefited the independent (no brand)
players
|
Summary
|
|
n
|
According
to ANP, total
consumption of fuel,
including diesel, gasoline, and
alcohol reached 67 million m3
in
2006
|
|
–
|
Consumption
of
fuel has reached an average annual growth rate of 1.4% in
the last 5 years
(0.9% growth for diesel, 1.2% for gasoline, and 6.7% for
alcohol)
|
|
n
|
Consumption
of the
three main fuel
products (gasoline, alcohol,
and diesel) grows
as
the number of cars
grows. Ethanol-fueled
vehicles are expected to post the highest
growth rate, due
to the large number of
flexible fuel (flex-fuel) cars entering the
market
|
|
n
|
The
fuel distribution industry in
Brazil has significant growth potential based on the expected
growth of
the Brazilian economy, and the relatively high number of
inhabitants per
car observed in Brazil compared to other
countries
|
|
n
|
Foreign
players have been
relatively conservative in regards to their expansion
plans, while some
have already exited the country. In contrast, Ipiranga
and BR are
committed to increase their market share and expand their
national
footprint
|
|
79
|
| Overview of the industries in which the assessed companies operate |
Appendix
III
|
Brazilian
petrochemical industry
According to ABIQUIM, sales in the Brazilian chemical and petrochemical sector grew 17% between 2000 and 2006, or 2.7% per year
|
Brazilian
market data – 2006
|
||||||||||||||||
|
(000
tons)
|
Total
production
|
Imports
|
Exports
|
Total
consumption
|
||||||||||||
|
Olefins
|
5,298
|
3
|
171
|
5,130
|
||||||||||||
|
Aromatics
|
1,531
|
91
|
410
|
1,211
|
||||||||||||
|
Polyolefins
|
3,570
|
402
|
1,022
|
2,949
|
||||||||||||
|
PVC
|
676
|
127
|
51
|
752
|
||||||||||||
|
PET
|
307
|
173
|
31
|
449
|
||||||||||||
|
Caprolactam
|
45
|
7
|
18
|
34
|
||||||||||||
Note:
Total
consumption is an estimate; 2006 figures based on preliminary data
Source: Braskem
20-F
|
Comments
|
|
n
|
The
Brazilian
petrochemical industry is organized into first, second,
and third
generation producers based on the stage of raw material
processing
|
|
–
|
1st
generation producers convert naphtha into basic
petrochemicals
|
|
–
|
2nd
generation producers process basic petrochemicals into intermediate
products
|
|
–
|
3rd
generation producers transform intermediate
products into final products
|
|
n
|
The
Brazilian
petrochemical industry is the largest in Latin America,
but suffers from
the lack of integration between businesses and the dependence
on imports
of raw materials such as naphtha
|
|
n
|
Petrobras
and
its subsidiaries are attempting to diminish Brazilian
dependence on
petrochemical imports through investment projects involving
petroleum,
gas, and naphtha
|
|
n
|
Brazil’s
major
petrochemical production centers are located in Camaçari, Triunfo, and
Cubatão. Two large investment projects are located in Rio de
Janeiro
(Comperi) and in Pernambuco (Abreu e Lima), with operations
expected to
begin in 2012
|
|
n
|
According
to
BMI, the main companies operating in Brazil include
Braskem, Copesul,
Petroquímica União, Rio Polímeros, Ultrapar, Politeno, and Dow
Química
|
Source: Braskem
20-F, Business Monitor International
|
80
|
| Overview of the industries in which the assessed companies operate |
Appendix
III
|
Brazilian
LPG distribution industry
|
Summary
|
|
n
|
In
2006,
Brazilian LPG market sales totaled 6.5 million tons.
87% was produced in
Brazil and the balance was imported
|
|
n
|
Primary
use of
LPG:
|
|
–
|
Bottled:
Cooking (historically around 70% of
sales)
|
|
–
|
Bulk:
Cooking
and heating in shopping malls, hotels, residences,
hospitals, and
industrial centers
|
|
n
|
Petrobras
is
responsible for all national production of LPG (87%
of national
consumption). LPG is transported from Petrobras storage
facilities via
pipelines and trucks to the LPG distributors, who then
sell it in the
retail market
|
|
n
|
The
market for
LPG is considered mature with moderate growth potential,
dependent on
economic growth (which will lead consumers to substitute
firewood for
LPG)
|
|
n
|
Market
competition is largely based on brand positioning,
customer service, and
the efficiency of logistics and
distribution
|
Source: Ultrapar
20-F
|
Distributors
in the market
|
|||||
|
2006
|
2005
|
2004
|
|||
|
Ultragaz
|
23.9%
|
24.0%
|
24.1%
|
||
|
SHV
Gas
|
23.3%
|
23.4%
|
20.5%
|
||
|
Liquigás
|
21.7%
|
21.8%
|
21.8%
|
||
|
Butano
|
18.5%
|
18.3%
|
18.7%
|
||
|
Others
|
12.6%
|
12.5%
|
14.9%
|
||
|
Total
|
100.0%
|
100.0%
|
100.0%
|
||
|
Description
|
|
n
|
Ultragaz:
Brazil’s market leader in LPG
distribution, with over 1.5 million tons delivered
in
2006
|
|
n
|
SHV
Gas:
A distributor controlled by
multinational corporation SHV Energy, and operating
under the brands
“Minasgás” and
“Supergasbrás”
|
|
n
|
Liquigás:
Acquired by Petrobras from the
ENI Group in June 2004; has operated in the Brazilian
LPG sector for over
40 years
|
|
n
|
Butano:
A Brazilian LPG distributor with over 45 years
of market
experience
|
Source: Ultrapar
20-F
|
81
|
| Calculation backup |
Appendix
IV
|
Appendix
IV
Calculation
backup
|
82
|
| Calculation backup |
Appendix
IV
|
TEV
calculation for selected companies
|
RIPI
Opco
|
DPPI
Opco
|
IPQ
S.A.
|
||||||||
|
Description
|
Obs.
|
Description
|
Obs.
|
Description
|
Obs.
|
|||||
|
EBITDA
(R$
million)
|
1.42
|
In
2006
|
TEV
(R$
million)
|
566
|
TEV
DPPI (cash
flow pg. 46)
|
Copesul
(R$
million)
|
5,635
|
100%
Copesul
(pg. 51)
|
||
|
R$/US$
average
|
2.19
|
2006
average
|
R$/US$
-
report
|
2.1385
|
12/31/2006
|
Copesul
(R$
million)
|
1,660
|
(1)
29.46%
Copesul
|
||
|
EBITDA
(US$
million)
|
0.6
|
In
2006
|
TEV
(US$
million)
|
265
|
(1)
TEV DPPI
in US$
|
IPQ
Op. (R$
million)
|
1,452
|
(2)
100% IPQ
Op. (pg. 56)
|
||
|
Multiple
|
6.5x
|
Refer
to pg.
76
|
EBITDA
(R$
million)
|
66
|
EBITDA
DPPI
|
TEV
(R$ million)
|
3,112
|
TEV
IPQ SA (3)=(1)+2
|
||
|
TEV
(US$
million)
|
4
|
R$/US$
average
|
2.19
|
average
for
2006
|
||||||
|
R$/US$
-
report
|
2.1385
|
12/31/2006 |
EBITDA
(US$
million)
|
30.1
|
(2)
EBITDA
DPPI in US$
|
|||||
|
TEV
(R$ million)
|
9
|
TEV
RIPI Opco
|
TEV/
2006 EBITDA
|
8.8x
|
(3) = (2) / (1) | |||||
|
|
|
|
||||||||
|
EBITDA
(R$
million)
|
16.3
|
EBITDA
Isa-Sul
2006
|
||||||||
|
R$/US$
average
|
2.19
|
average
for
2006
|
||||||||
|
EBITDA
(US$
million)
|
7.4
|
In
2006
|
||||||||
|
Multiple
|
8.8x
|
(3)
above
|
||||||||
|
TEV
(US$
million)
|
65
|
|||||||||
|
R$/US$
-
report
|
2.1385
|
12/31/2006
|
||||||||
|
TEV
(R$ million)
|
140
|
TEV
Isa-Sul
|
||||||||
|
TEV
(US$
million)
|
566
|
|||||||||
|
TEV
(R$ million)
|
706
|
TEV
DPPI Opco
|
||||||||
|
IQ
Opco
|
CBPI
Opco
|
|||||||||
|
Description
|
Description
|
EMCA
|
IASA
|
AM/PM
|
Obs.
|
|||||
|
EBITDA
(R$
million)
|
20.8
|
In
2006
|
EBITDA
(R$
million)
|
3
|
13.4
|
32.2
|
In
2006
|
|||
|
R$/US$
average
|
2.19
|
2006
average
|
R$/US$
average
|
2.19
|
2.19
|
2.19
|
2006
average
|
|||
|
EBITDA
(US$
million)
|
9.5
|
In
2006
|
EBITDA
(US$
million)
|
1.4
|
6.1
|
14.7
|
In
2006
|
|||
|
Multiple
|
8.6x
|
Refer
to pg.
76
|
Multiple
|
6.3x
|
6.8x
|
7.5x
|
Refer
to pgs.
75, 77 & 76
|
|||
|
TEV
(US$
million)
|
82
|
TEV
(US$
million)
|
9
|
42
|
110
|
|||||
|
R$/US$
-
report
|
2.1385
|
12/31/2006
|
R$/US$
-
report
|
2.1385
|
2.1385
|
2.1385
|
12/31/2006
|
|||
|
TEV
(R$ million)
|
176
|
TEV
IQ
Opco
|
TEV
(R$ million)
|
18
|
89
|
236
|
TEV
|
|||
|
Description
|
||||||||||
|
TEV
(R$
million)
|
2,421
|
TEV
CBPI (cash
flow pg. 40)
|
||||||||
|
TEV
(R$
million)
|
18
|
TEV
EMCA
|
||||||||
|
TEV
(R$
million)
|
89
|
TEV
IASA
|
||||||||
|
TEV
(R$
million)
|
236
|
TEV
AM/PM
|
||||||||
|
TEV
(R$ million)
|
2,764
|
TEV
CBPI Opco
|
||||||||
|
83
|
| Calculation backup |
Appendix
IV
|
Net
debt
calculation
|
Copesul
|
IPQ
|
|||
|
Total
debt
|
358.71
|
Total
debt
|
865.56
|
|
|
Pension
funds
|
8.85
|
Pension
funds
|
6.82
|
|
|
Dividends
payable
|
201.75
|
Dividends
payable
|
17.15
|
|
|
Contingencies
|
34.46
|
Contingencies
|
9.44
|
|
|
Payables
to
related parties
|
4.53
|
Payables
to
related parties
|
(7.52)
|
|
|
Cash
&
equivalents
|
(303.86)
|
Cash
&
equivalents
|
(21.22)
|
|
|
(+)
29.46%
Copesul net debt
|
89.69
|
|||
|
Net
debt/(cash)
|
304.44
|
Net
debt/(cash)
|
959.92
|
|
|
Note:
All
figures in R$ million
|
Note:
All
figures in R$ million
|
|||
|
Source:
Financial statements of Copesul as of December
31,
2006
|
Source:
Financial statements of IPQ as of December
31,
2006
|
|||
|
IQ
|
CBPI
|
|||
|
Total
debt
|
7.79
|
Total
debt
|
677.83
|
|
|
Pension
funds
|
2.18
|
Pension
funds
|
53.47
|
|
|
Dividends
payable
|
(70.59)
|
Dividends
payable
|
0
|
|
|
Contingencies
|
0.87
|
Contingencies
|
91.37
|
|
|
Payables
to
related parties
|
123.59
|
Payables
to
related parties
|
(36.31)
|
|
|
Cash
&
equivalents
|
(4.00)
|
Cash
&
equivalents
|
(157.64)
|
|
|
(+)
92.39% IPQ
net debt
|
886.83
|
(+)
41.47% IQ
net debt
|
392.61
|
|
|
Net
debt/(cash)
|
946.67
|
Net
debt/(cash)
|
1,021.33
|
|
|
Note:
All
figures in R$ million
|
Note:
All
figures in R$ million
|
|||
|
Source:
Financial statements of IQ as of December
31, 2006
|
Source:
Financial statements of CBPI as of December
31,
2006
|
|||
|
84
|
| Calculation backup |
Appendix
IV
|
Net
debt
calculation(continued)
|
DPPI
|
RIPI
|
|||
|
Total
debt
|
60.61
|
Total
debt
|
0
|
|
|
Pension
funds
|
31.18
|
Pension
funds
|
39.75
|
|
|
Dividends
payable
|
0
|
Dividends
payable
|
17.89
|
|
|
Contingencies
|
3.04
|
Contingencies
|
1.37
|
|
|
Payables
to
related parties
|
(40.80)
|
Payables
to
related parties
|
27.87
|
|
|
Cash
&
equivalents
|
(101.14)
|
Cash
&
equivalents
|
(5.70)
|
|
|
(+)
21.01%
CBPI net debt
|
214.62
|
(+)
58.53%
IQ
|
554.05
|
|
|
(+)
11.42%
CBPI net debt
|
116.63
|
|||
|
(+)
7.65% DPPI
net debt
|
12.81
|
|||
|
Net
debt/(cash)
|
167.52
|
Net
debt/(cash)
|
764.67
|
|
|
Note:
All
figures in R$ million
|
Note:
All
figures in R$ million
|
|||
|
Source:
Financial statements of DPPI as of
December 31, 2006
|
Source:
Financial statements of RIPI as of
December 31,
2006
|
|||
|
Ultrapar
|
||||
|
Cash
and
Marketable securities
|
(1,070.08)
|
|||
|
Long
term
investments
|
(547.98)
|
|||
|
Short
term
Loans
|
102.76
|
|||
|
Long
term
Loans
|
1,081.85
|
|||
|
Debentures
|
312.79
|
|||
|
Dividends
|
101.38
|
|||
|
Pension
funds
|
0
|
|||
|
Net
debt/(cash)
|
(19.28)
|
|||
|
Note:
All
figures in R$ million
|
||||
|
Source:
Financial statements of Ultrapar as
of December 31,
2006
|
||||
|
85
|
| Calculation backup |
Appendix
IV
|
Corporate
tax rate (IR+CS)
When
applicable, as
in the cases of Copesul, CBPI, and DPPI,
the projections were based on the
average effective corporate tax rate over
the past 3 years as shown in the
tables that follow. This assumption was
validated by the management of the
companies in confirmatory due diligence
performed by Deutsche Bank
For
IPQ, in addition to the company’s historical data, the projections were
based on
our assessment for companies in this sector.
An effective tax rate of 25% for
the coming years was considered adequate
by the management of IPQ in
confirmatory due diligence
|
Copesul
|
CBPI
|
DPPI
|
|||||||||||
|
2004A
|
2005A
|
2006A
|
2004A
|
2005A
|
2006A
|
2004A
|
2005A
|
2006A
|
|||||
|
Result
before IR/CS1
|
722
|
722
|
822
|
Result
before IR/CS1
|
231.0
|
294.3
|
239.3
|
Result
before IR/CS1
|
86.1
|
123.3
|
92.8
|
||
|
IR/CS
|
(242)
|
(231)
|
(270)
|
IR/CS
|
(58.7)
|
(79.0)
|
(58.9)
|
IR/CS
|
(21.5)
|
(29.8)
|
(18.0)
|
||
|
Effective
rate
|
33.5%
|
31.9%
|
32.8%
|
Effective
rate
|
25.4%
|
26.9%
|
24.6%
|
Effective
rate
|
25.0%
|
24.2%
|
19.3%
|
||
|
average
|
32.8%
|
average
|
25.6%
|
average
|
22.8%
|
||||||||
|
(1)
Excludes equity income
result
|
(1)
Excludes equity income
result
|
(1)
Excludes equituy income
result
|
|||||||||||
|
Values
in millions of
Reais
|
Values
in millions of
Reais
|
Values
in millions of
Reais
|
For
Ultrapar, the projections were based on
a greater effective tax rate (22%) than
the average of the last 3 years (16%).
Such assumption is based on Ultrapar’s
guidance which reflects a conservative
view of expected fiscal incentives for
projects located in areas under the influence
of ADENE (previously
SUDENE)
|
Ultrapar
|
||||
|
2004A
|
2005A
|
2006A
|
||
|
Result
before IR/CS1
|
502.9
|
329.2
|
342.5
|
|
|
IR/CS
|
(81.5)
|
(49.3)
|
(61.4)
|
|
|
Effective
rate
|
16.2%
|
15.0%
|
17.9%
|
|
|
average
|
16.4%
|
|||
|
(1)
Excludes
equity income result
|
||||
|
Values
in millions of
Reais
|
|
86
|
| Calculation backup |
Appendix
IV
|
Capital
structure
Our
analysis is based on companies that best
represent each sector, excluding the
companies that, from our point of view, are
under-levered or
over-levered
|
Petrochemical
|
Distribution
|
|||||||||||||
|
The
optimal capital structure is
estimated as 50%
debt, 50%
equity
|
The
optimal capital structure is
estimated as 40%
debt, 60%
equity
|
|||||||||||||
|
Market
|
Net
|
Net
|
Market
|
Net
|
Net
|
|||||||||
|
Company
|
Cap1
|
Debt2
|
debt/Cap
|
Company
|
Cap1
|
Debt2
|
debt/Cap
|
|||||||
|
Braskem
|
4,966
|
4,512
|
48%
|
Pantry
|
1,075
|
750
|
41%
|
|||||||
|
Suzano
Petroquímica
|
970
|
1,541
|
61%
|
|||||||||||
|
Petroquímica
União
|
1,137
|
417
|
27%
|
Average
|
41%
|
|||||||||
|
Average
|
45%
|
Median
|
41%
|
|||||||||||
|
Median
|
48%
|
|||||||||||||
|
|
||||||||||||||
|
Notes:
|
Notes:
|
|||||||||||||
|
Values
in R$
million
|
Values
in R$
million
|
|||||||||||||
|
(1)
Market
capitalization as of February 28,
2007
|
(1)
Market
capitalization as of February 28,
2007
|
|||||||||||||
|
(2)
Balance
sheet as of December 2006 including
minority
interest
|
(2)
Balance
sheet as of December 2006 including
minority
interest
|
|||||||||||||
|
Source:
Bloomberg, FactSet, and the companies
|
Source:
Bloomberg, FactSet, and
Pantry
|
|||||||||||||
|
Ultrapar
|
|
Our
analysis
uses a sub-optimal capital structure
of 35% debt, 65% equity, based
on the
capital structure observed in a
sample of companies* that include
those
with a sub-optimal capital structure,
in line with the recent practice
by
Ultrapar of maintaining low financial
leverage
|
|
Notes:
(*)
For
example: petrochemical companies
(Braskem, Suzano Petroquimico,
Petroquimica União) and gas distributors (Amerigas
Partners LP, Ferrellgas
Partners LP, Buckeye Partners LP,
Enbridge Energy Partners LP, Enterprise
Product Partners LP, Kinder Morgan
Energy Partners LP, Magellan Midstream
Partners LP, Plains All American
Pipeline LP, Crosstex Energy LP,
Copano
Energy LLC)
|
|
n
|
Fuel
distribution: considering a capital
structure based on the same sample
used for the beta, it would result
in a 12.7% WACC for CBPI and
12.7% WACC
for DPPI. We considered more
appropriate to use a more refined
sample
excluding the companies Casey’s and Alimentation Couche, which
have
sub-optimal capital structures
(less than 20% debt), that resulted
in a
12.2% WACC for CBPI and 12.3%
WACC for
DPPI
|
|
n
|
Petrochemical:
considering a capital structure
based on the same sample used
for the
beta, it would result in a 11.7%
WACC for Copesul and a 12.0%
WACC for
IPQ. We considered more appropriate
to use a more refined sample
excluding
the companies Copesul, BASF,
and Nova Chemicals, which have
sub-optimal
capital structures (below 20%
debt and above 70% debt), that
resulted in a
11.2% WACC for Copesul and 11.8%
WACC for
IPQ
|
|
n
|
For
Ultrapar,
we observed the debt to capital
ratio of other companies with
the same
underlying operations as Ultrapar8,
such as for
example: petrochemical companies
(Braskem, Suzano Petroquimica,
Petroquimica União) and LPG distributors (Amerigas
Partners LP, Ferrellgas
Partners LP, Buckeye Partners
LP, Enbridge Energy Partners
LP, Enterprise
Product Partners LP, Kinder Morgan
Energy Partners LP, Magellan
Midstream
Partners LP, Plains All American
Pipeline LP, Crosstex Energy
Inc.,
Crosstex Energy LP, Copano Energy
LLC). We have not excluded companies
whose capital structure were
sub-optimal in line with Ultrapar’s
management preference for a low
financial
leverage
|
8
For
example, the average of the betas of the
referenced companies is 0.53, below the
beta of 0.64 implicit for Ultrapar under
the utilized assumptions (pg. 24). We
consider the observed beta for Ultrapar
to be
more
appropriate
than the average of the comparable companies
within similar operations. The
betas for each company are: Braskem (0.76),
Suzano Petroquimica (0.36),
Petroquimica União (0.42), Amerigas Partners LP (0.24),
Ferrellgas Partners LP
(0.11), Buckeye Partners LP (0.42), Enbridge
Energy Partners LP (0.32),
Enterprise Product Partners LP (0.54),
Kinder Morgan Energy Partners LP (0.34),
Magellan idstream Partners LP (0.51), Plains
All American Pipeline (0.47),
Crosstex Energy Inc. (0.69), Crosstex Energy
LP (0.42), Copano Energy LLC
(0.44). (source: Bloomberg)
|
87
|
| Calculation backup |
Appendix
IV
|
Brazilian
fuel market
The
volume
of fuel (alcohol and gasoline only) was calculated
by multiplying the number of
cars in Brazil (based in the regression of
number of cars versus the GDP per
capita) by the estimated average consumption
of fuel for each type of
vehicle
The
average fuel consumption was estimated
to be approximately 1.23
m3/year for gasoline-based vehicles,
and approximately
1.75m3/year for vehicles that consume
alcohol, based on the different
energy content of alcohol and gasoline
|
88
|
| Calculation backup |
Appendix
IV
|
Capital
expenditure – CBPI cash flow
|
(in
millions of Reais unless
otherwise indicated)
|
2007E
|
2008E
|
2009E
|
2010E
|
2011E
|
2012E
|
2013E
|
2014E
|
2015E
|
2016E
|
|
|
a)
Total investments by the
company
|
304.2
|
288.9
|
357.9
|
429.3
|
498.2
|
449.4
|
486.7
|
554.3
|
611.8
|
626.0
|
|
|
a.1)
Fixed assets
(50%)
|
152.1
|
144.5
|
178.9
|
214.6
|
249.1
|
224.7
|
243.3
|
277.1
|
305.9
|
313.0
|
Graph
pg.
44
|
|
a.2)
Financing to
clients1
(50%)
|
152.1
|
144.5
|
178.9
|
214.6
|
249.1
|
224.7
|
243.3
|
277.1
|
305.9
|
313.0
|
|
|
b)
Repayment
of financing to clients2
|
144.9
|
147.3
|
147.2
|
158.5
|
179.3
|
214.2
|
229.5
|
239.0
|
248.4
|
275.5
|
|
|
(a)
- (b) = c) CBPI Investments
(R$ million)
|
159.3
|
141.6
|
210.7
|
270.8
|
318.8
|
235.1
|
257.2
|
315.2
|
363.4
|
350.6
|
|
|
c) CBPI Investments (US$ million)
|
73.7
|
63.2
|
91.3
|
115.7
|
134.2
|
97.6
|
105.2
|
127.0
|
144.3
|
137.2
|
DCF
pg.
40
|
|
Notes:
|
(1)
Assumes
that CBPI finances investments
to clients over an average
of 3
years
|
|
(2)
Repayment
of principal included in other
operating income (included
in
EBIT)
|
The
Discounted Cash Flow depicted on page
40 of this Report is in US dollar in
contrast to the chart on page 44 that
is in Brazilian Reais
In
general, all investments in the distribution
network are equally shared between
CBPI and the dealer (owner of the point
of sale, or the “Client”). CBPI is
responsible for 50% (fifty percent) of
all capital expenditures, which are
capitalized on the company’s balance sheet. The other 50% (fifty
percent) of
expenditures are the Clients’ responsibilities who pay for it through
a
financing line from CBPI, which is amortized
over 3 years
CBPI’s
cash outflow
depicted in the Discounted Cash Flow
is, therefore, 100% (one hundred percent)
of the annual investments in the distribution
network in each year (item “a”
above) minus the Client’s repayments of financing relative to
previous years
investments (item “b” above)
|
89
|
| Calculation backup |
Appendix
IV
|
Capital
expenditure – DPPI cash flow
|
(in
millions of Reais unless
otherwise indicated)
|
2007E
|
2008E
|
2009E
|
2010E
|
2011E
|
2012E
|
2013E
|
2014E
|
2015E
|
2016E
|
|
|
a)
Total investments by the
company
|
49.0
|
42.8
|
45.7
|
47.6
|
42.8
|
53.6
|
53.4
|
55.5
|
57.0
|
51.3
|
|
|
a.1)
Fixed assets
(50%)
|
24.5
|
21.4
|
22.9
|
23.8
|
21.4
|
26.8
|
26.7
|
27.7
|
28.5
|
25.7
|
Graph
pg.
49
|
|
a.2)
Financing to
clients1
(50%)
|
24.5
|
21.4
|
22.9
|
23.8
|
21.4
|
26.8
|
26.7
|
27.7
|
28.5
|
25.7
|
|
|
|
|
|
|
|
|
|
|||||
|
b)
Repayment of financing to clients2
|
17.6
|
25.8
|
32.9
|
22.9
|
22.7
|
22.7
|
24.0
|
25.0
|
27.1
|
27.6
|
|
|
(a)
- (b) = c) DPPI Investments
(R$ million)
|
31.4
|
17.0
|
12.8
|
24.6
|
20.1
|
30.9
|
29.4
|
30.5
|
29.9
|
23.7
|
|
|
c)
DPPI Investments
(US$ million)
|
14.5
|
7.6
|
5.6
|
10.5
|
8.5
|
12.8
|
12.0
|
12.3
|
11.9
|
9.3
|
DCF
pg.
46
|
|
Notes:
|
(1)
Assumes
that CBPI finances investments
to clients over an average of
3
years
|
|
(2)
Repayment
of principal included in other
operating income (included in
EBIT)
|
The
Discounted Cash Flow depicted on page
46 of this Report is in US dollar in
contrast to the chart on page 49 that
is in Brazilian Reais
In
general, all investments in the distribution
network are equally shared between
CBPI and the dealer (owner of the point
of sale, or the “Client”). CBPI is
responsible for 50% (fifty percent) of
all capital expenditures, which are
capitalized on the company’s balance sheet. The other 50% (fifty
percent) of
expenditures are the Clients’ responsibilities who pay for it through
a
financing line from CBPI, which is amortized
over 3 years
CBPI’s
cash outflow
depicted in the Discounted Cash Flow
is, therefore, 100% (one hundred percent)
of the annual investments in the distribution
network in each year (item “a”
above) minus the Client’s repayments of financing relative to
previous years
investments (item “b” above)
|
90
|
| Other relevant information |
Appendix
V
|
Appendix
V
Other
relevant information
|
91
|
| Other relevant information |
Appendix
V
|
Mr.
José
Manuel Magro – external consultant
Mr.
José
Manuel Magro was hired by Ultra to advise on
the analysis of the Brazilian fuel
market and on the analysis of CBPI and DPPI’s
operations
|
n
|
Mr.
José
Manuel Magro has a BBA from Fundação Getulio Vargas (RJ), got a
postgraduate degree in International
Marketing at INSEAD – France and
earned his MBA in Marketing from a
joint program ESPM Brazil / University
of California Riverside, US
|
|
n
|
Mr.
José
Manuel Magro has worked for over 18
years at the Shell group. Mr. José
Manuel Magro joined Shell in Brasil
in 1981 in the Lubricants Planning
division, which was followed by assignments
in Operations, Aviation
business and Marketing divisions
|
|
n
|
In
1989, Mr.
José Manuel Magro joined Shell Portugal
as Marketing and Automotive Fuels
Retail Director where he was responsible
for the start-up of the
Automotive division of Shell in
Spain
|
|
n
|
In
1994, Mr.
José Manuel Magro became the Marketing Coordinator
for Shell’s
International Automotive Retail division
based in London, England. He also
represented Shell’s shareholder to oversee the investments
in the
automotive retail businesses in South
Europe and Latin America, especially
in Italy, Spain, Portugal, Brazil,
Chile and Argentina. Mr. José Manuel
Magro assisted Group to launch and
international policy for pricing fuels,
the customer loyalty program “Smart” and the “Select” convenience store
business
|
|
n
|
In
1997, Mr.
José Manuel Magro returned to Shell Brasil
as Director for the Automotive
Fuels Retail Marketing division responsible
for the development and
management of the Brazilian retail
network that reached 3,200 retail sites
and over 300 convenience stores
|
|
n
|
At
the end of
1999, Mr. José Manuel Magro left Shell to become the
Marketing Vice
President of TAM, a Brazilian airline
carrier, where he launched the
loyalty program “Fidelidade” and the partnerships with American
Airlines
and Air France
|
|
n
|
In
2002, Mr.
José Manuel Magro joined the British global
communication group WPP where
he covered oil companies. He was part
of the Global team responsible for
the development of British Petroleum
(“BP”) brand. Also in 2002, Mr. José
Manuel Magro became the CEO of the
advertising agency Red Cell Brazil/
141
Worldwide
|
|
n
|
In
2006, Mr.
José Manuel Magro became Young & Rubicam’s Vice President, the largest
Brazilian advertising agency whose
main clients include TAM, Casas Bahia,
VIVO, Danone, Bradesco and
Chevron/Texaco
|
|
92
|
Description
of capital expenditure – CBPI
|
Comments
|
NOPLAT
growth versus Reinvestment rate
|
|||
|
The
capex in perpetuity
adds
value to CBPI as
the
ROC is higher than
the
WACC
|
n Investments
in
perpetuity add value to CBPI
– In
perpetuity,
the normalized free cash flow to
the Firm is 11.5% higher than the
cash
flow in the last year of the projections
despite capex being higher than
depreciation
– The
reinvestment rate in perpetuity
is 45% lower than the average reinvestment
rate over the projection period
– The
Return on
Capital (“ROC”) in perpetuity is 29.6%, therefore
higher than the cost of
capital
– ROC
= growth
rate divided by the reinvestment
rate
n CBPI’s
free
cash flow in perpetuity has been
normalized9
to serve as
base for the calculation of CBPI’s terminal value because the company
in
the end of the projections is not
considered mature yet
– During
the
projections, NOPLAT growth fluctuates
reflecting the company is not mature
yet. Accordingly, the reinvestment
rate also fluctuates
– Assumes
an
annual 3% growth in volumes for
CBPI to maintain its market
share
– Capex
was
estimated based on the expected
number of gas stations required
to sell
the estimated volume of fuels
– opening
of 164
new gas stations to sell the extra
fuel being distributed
– renovating
about 850 stations (equal to 20%
of the base in the last year of
the
projections)
– Repayment
of
client financing is sufficient
to finance clients’ future
capex
|
 |
||
 |
n In
perpetuity, capex is greater than depreciation
– In
this case, the growth in perpetuity
requires substantial
investments
– Depreciation
is not adjusted for inflation
as the investments are
– The
projection is not sufficiently
long to reach the expected maturity
of the
market in the terminal year
n There
are precedents in literature
and in the Brazilian market
– Copeland
stated that estimating cash flow
in perpetuity should reflect
expectations
of the evolution of the business
and the sector10
– This
assumption is validated by Damodaran11
– The
Valuation Report for Ferronorte,
Ferroban and ALL is based on
Gordon’s
Growth Model in the final year
of projections, in which capex
was expected
to be greater than depreciation
n Part
of CBPI’s investments is not CBPI’s capex (and does not incorporate
CBPI’s
asset base), but it also incorporate
Clients net financing (refer
to pg.
89 and 94)
|
CBPI’s
Reinvestment rate
 |
(9)
We believe it was inappropriate to perpetuate
the last cash flow of the
projections as CBPI has not yet reached its
maturity at that point.
(10)
“Estimating
the
continuing value parameters should be an
integral part of the forecasting
process. The continuing value parameters
should reflect a coherent forecast for
the long term economic situation of the company
and its industry” from
Valuation: measuring and managing the value
of companies. Copelland, Tom.
Koller, Tim. Murrin, Jack (McKinsey and Company).
John Willey and Sons, USA, 3rd
edition, pg 277.
(11)
The dark side
of valuation: valuing old tech, new tech,
and new economy companies, de Aswath
Damodaran, pgs. 199 e 207.
|
|
|
93
|
Description
of capital expenditure – CBPI(continued)
|
Reinvestment
rate versus Sales volume growth
|
Capex
versus Depreciation
|
|
 |
 ■The
hypothetical example above demonstrates
that in years 10 and 11, when the
company is in equilibrium and investing
at the same rate as depreciation,
there is a difference between capex
and depreciation
■
The
difference results from the monetary
adjustment in assets value vis-a-vis
the linear depreciation of assets
(which is not adjusted for
inflation)
Note:
Values
above are in nominal terms for
illustrative purpose
only
|
|
|
Note:
Sales volume growth should not
be compared with the “g” in Gordon’s growth
model which corresponds to the
growth of the free cash flow to
the
firm
|
|
94
|
Considerations
regarding AM/PM valuation
|
n
|
As
usual in
valuation exercises, we have
used the DCF method for the most
relevant
companies that were part of the
Ipiranga
Group
|
|
–
|
The
other companies12
being
evaluated were valued based on
multiples because the preparation
of
projections would be subject
to a high level of imprecision
and wouldn’t
improve the quality of the analysis
|
|
n
|
We
considered
inappropriate to value AM/PM
based on the DCF
analysis
|
|
–
|
The
projected
cash flow would be subject to
significant imprecision that
wouldn’t
improve the conclusions from
the
analysis
|
|
–
|
A
valuation based on DCF assumes
the company is able to independently
execute its business plan in
order to maximize its value.
This assumption
is incorrect for AM/PM as its
operations are directly dependent
on CBPI’s
strategy on fuels distribution13
|
|
–
|
Forecasts
for
AM/PM would be based on arbitrary
assumptions that would be difficult
to
justify, as for example, estimating
the number of CBPI’s clients that
would be interested in opening
an AM/PM store in their gas stations14
and how this
additional AM/PM store would
impact the consolidated margins.
The
valuation based on CBD’s multiple avoided using such
speculative
assumptions about AM/PM business
plan and therefore was the best
estimate
of AM/PM’s value
|
|
n
|
The
quality of
the valuation based on multiples
depends on the quality of the
sample15
and not on
its size. The quality of the
valuation analysis based on multiples
depends
on the similarities of the companies
in the sample and the company
being
assessed. We have analyzed the
companies that could potentially
be
included in the sample and we
have selected those that in our
opinion
would be a good benchmark for
the valuation of
AM/PM
|
|
n
|
AM/PM’s
valuation was based on CBD multiples
because CBD is the Brazilian
company
that best reflects AM/PM’s business plan. CBD has been
selected16
as the best
benchmark of value given its
business profile, the characteristics
of the
products being sold, its growth
profile and
margins
|
|
n
|
Historical
growth rates reflect Ipiranga’s strategy to launch AM/PM stores
primarily
on Ipiranga’s own gas stations and in the
best locations available in the
network. In the future, we expect
growth rates to be lower given
that
AM/PM’s growth strategy and market
positioning are limited to the
gas
station network, the desire and
viability of opening AM/PM stores,
and the
Ipiranga Group and the clients
agreeing on opening
stores
|
(12)
Specifically,
AM/PM represents approximately 6% of
CBPI’s value.
(13)
AM/PM is not
able to independently outline and execute
a plan to maximize sales and improve
profitability, but rather, AM/PM is part
of CBPI which in turn is focused on the
business of distributing fuel, and therefore
increase the Ipiranga’s brand
recognition. AM/PM does not operate in
a captive market as AM/PM potential
clients can acquire their products in
other locations such as supermarkets
(CBD), other gas stations (within the
network or not), and other types of stores
such as restaurants, coffee shops, etc.
(14)
Expanding the
AM/PM network is not an exclusive decision
of the Ipiranga Group, and therefore
is not solely based on Ipiranga Group’s economic perspective. Opening an AM/PM
store depends on client and Ipiranga
to agreeing on opening a store. Note
that
the client is not obliged to open an
AM/PM store, but rather, the Client could
open any other convenience store in their
gas stations. In addition, not all the
gas stations are ready to the opening
of an AM/PM store, which is subject to
certain criteria such as location and
space among others.
(15)
Deutsche
Bank did not consider correct to compare
AM/PM to apparel stores such as Renner,
internet based Submarino, department
stores or any other retailer focused
on
selling toys or electronics
(16)
Naturally, other companies were considered
to be incorporated into the sample,
however we understand CBD is the best
benchmark of value comparable to AM/PM.
Adding more companies to the sample just
for the sake of increasing the number
of companies in the sample would not
improve the quality of the analysis nor
the
conclusions, but it would compromise
the conclusions of the
analysis.
|
95
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Date: October
9, 2007
|
ULTRAPAR
HOLDINGS INC.
|
||
|
By:
|
/s/
André Covre
|
|
| Name: |
André
Covre
|
|
| Title: |
Chief
Financial and Investor Relations
Officer
|
|
(Public
Offer Notices and Valuation Report – October 9,
2007)