Pdg Raises Its Stake On Goldfarb To 70%

1

PDG Realty raises its stake in Goldfarb to 70%

Investors Relations:

Michel Wurman Investors Relations Director

João MalletInvestors Relations Manager

Telephone: (21) 3504 3800E-mail: [email protected]

Website: www.pdgrealty.com.br/ri

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Agenda

Deal Rationale

Increase PDG Realty´s stake in Goldfarb

Valuation

PDG Realty Business Model

Final Comments

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Deal Rationale

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

Investment opportunity in segment with the largest repressed demand

Company with considerable growth potential and proven execution capacity

Accretive valuation

Arbitrage opportunity on discounts between listed companies versus private equity investments

Validate and ground the strategic alignment between the current shareholders of Goldfarb and PDG Realty

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PDG Realty increases its stake in Goldfarb

The company has over 40 years of experience and is one of the largest developers and homebuilders in the metropolitan area of São Paulo focused in popular and economic units

Successful business model based in 3 main principles :

– Focus in market segment (popular and economic units)

– Standardization of the development process resulting in low operational costs

– Production and sales verticalization

One of the largest Caixa Econômica Federal associative credit operators

The company owns a exclusive brokerage firm (Avance) with approximately 100 brokers, one of the largest in São Paulo´s metropolitan area

In 2007, Goldfarb expects to launch between 5 and 6 thousand units, reaching 10 thousand units in 2009.

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PDG Realty increases its stake in Goldfarb

Unlike most players, Goldfarb is exclusively focused in the market segment that concentrates the biggest and most promising consumer demand (popular and economic)

Total Residencies: 51.6 millions

Number of Residences (2006) Main Competitors Positioning

4%

7%

18%

71%

8.7 million

1.7 million

3.7 million

37.3 million

> 20 mmw

10 < > 20 mmw

5 < > 10 mmw

<5 mmw

HabitationalHabitational

DeficitDeficit

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Acquisition Structure

Equity acquisition of 21% of Goldfarb through capital increase and equity purchase from remaining partners

To be paid as follows:

– Capital increase of R$80 million, subscribed solely by PDG

– Acquisition, by PDG Realty, of a holding company which owns 12.5% of Goldfarb’s capital stock, by the issuance of 5,040,000 PDG´s shares to be subscribed by the remaining shareholders of Goldfarb’s

– A lockup period of 3 years for this PDG´s shares, with quarterly proportional sales of up to 8.33% of total position

• Following the aquisition PDG Realty will hold 70% of Goldfarb´s total shares

Net profit estimate for Goldfarb for 2008

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Acrretive Valuation

* * Based on the market expectations and PDG Realty evaluations when referred to Goldfarb

PDG Realty (as of 30/04/07)

110.652.081R$ 14,10

Goldfarb Deal

R$80 millionGoldfarb estimated P/E 2008 x 6,1

R$ 1.560 million8,6

P/E ’08 17,5 x

P/E ’08 5 ,6x

P/E ’08 5 x

DiscountPrivate equity vs. PDGR3

Discount2,5x

PDG

P/E´08 8,6x

P/E´08 6,1x

Peer Comparison: Rodobens estimated P/E 2008 x *

Goldfarb

11,3

P/E´08 5,6x

DiscountPrivate equity vs. RDNI3*

Rodobens

Discount5,2x

P/E ’08 6,1 x

Goldfarb

P/E´08 11,3x

# of sharesPrice per share

Market Cap.Estimated P/E 2008 x *

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Alignment of interests between shareholders and managementBusiness Model allows “hiring” the best management in the real state market

PDG Realty presents an unique business model on the Brazilian Real State market.

Diversification Strategy

Coverage in all income segments with leading brandsMarket Segmentation: residential development, land parcelling and income oriented projectsGeographic Presence: 26 cities in 3 states (SP, RJ e BA)Strong presence on the low-income segment

Growth PerspectivesSteady landbank expansion since the IPODevelopment capacity fueled by partnership business model

“White Label” real state company

PDG Realty is not perceived on the market as a competitor…… because it brings a complementary expertise to its partners

Unique return-oriented corporate company

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Proven track record

Deal flow guarantee: landbank (PDG Realty’s share) amounts to R$ 2.3 billion Potential capital gains: Following a private equity model, PDG will encourage and help its invested companies to grow and access capital markets.

Feb-06Additional acquisition

of 10%

Acquisitionof 20% stake

May-06

Set-06JVJV

Nov-06JVJV

Feb-07

Acquisition of 40% stake

Founding2003

2 projects launched

2003

5 projects launched2004



Jan-07

IPO

Private Equity and...

...co-developmentinvestments.

12 projects launched1º Q/2007

JVJV

April-07

Additional acquisition

of 21%

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Part.: 70%Focus: São Paulo and Rio de Janeiro

Portfolio Investments

Part: 17%Focus: São Paulo Part: 17% (indirect)

Focus: São PauloPart.: 50% of joint ventureFocus: São Paulo

Part: 50%Focus: Rio de Janeiro

Low IncomeLow Income Middle to high Middle to high incomeincome Land parcelingLand parceling Rental Income Rental Income

PropertiesProperties

Even in a competitive environment PDG Realty was able to make important acquisitions in accretive deals

PDG Realty´s track record proves its ability to continuously originate co-developments and private equity opportunities

JVJV

JVJV

ServicesServices

Part.: 20%Focus: Rio de Janeiro

Part AVANCE.: 49%Focus: São Paulo and Rio de Janeiro

Part: 50% of joint ventureFocus: Bahia

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Closing Remarks

Management expertiseManagement with strong real estate expertise, financial background and return oriented culture to implement PDG Realty´s business strategy

Additional capital gain potential

Capital gain potential from portfolio investments since PDG will help its invested companies to grow and access equity capital

Count on the best management teams in

the industry

Ability to “hire” the best management in the industry and leverage on their specific and local knowledge

Diversification

Expertise and capacity to invest in different:– Geographic regions– Markets – Income segments

Flexibility Flexibility to capture a large range of investment opportunities and market trends

The right platform to accomplish a sustainable long term growth

Unique business model in the Brazilian real estate market

Pdg Raises Its Stake On Goldfarb To 70%

Economy & Finance