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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (31945)	9/6/2008 3:37:13 PM
From: E_K_S	Read Replies (1) \| Respond to of 78778

Jurgis - In March 2007 UGP together with Petrobras and Braskem acquired the Ipirangu Group. This was the largest private sector acquisition ever to take place in Brazil. Petrobras acquired the fuel and lubricants distribution business in the North, Northeast and Midwest regions of Brazil, and jointly with Braskem acquired the petrochemical assets of the Ipiranga Group. The oil refining assets held by RPI are shared equally between Petrobras, Ultrapar and Braskem. For Ultrapar, the acquisition of Ipiranga is part of its growth strategy in the fuel distribution segment, where it already operated through Ultragaz in the distribution of LPG. Fuel distribution is an activity with the same profitability and success drivers of LPG distribution: a major brand, efficient logistics and excellence in the management of resellers network. The growth in fuel sales, gains in operational efficiency and the greater investment capacity, due to the simplification of the shareholding structure and the implementation of a simpler decision making process at Ipiranga, were all determining factors in the decision to make this acquisition. ============================================================= They took on a lot of debt in this acquisition and it will take several years of continued growth to generate the free flow cash they achieved before this purchase. This is the big negative I see for this company. EKS