On 17th November 2016 – Ultrapar Participações S.A. (“Ultrapar”) announced that its subsidiary Companhia Ultragaz S.A. (“Ultragaz”) signed a sale and purchase agreement with Petróleo Brasileiro S.A. (“Petrobras”) for the acquisition of 100% of the capital stock of Liquigás Distribuidora S.A. (“Liquigás”) (“Transaction”).
The enterprise value of the acquisition is R$ 2.8 billion. Such amount will be adjusted by the Brazilian interbank interest rate (CDI) of the period between the signing date and the closing of the Transaction, and will be subject to adjustments related to working capital and net debt position between 12/31/2015 and the closing date of the Transaction.
The completion of the Transaction is subject to the approval by the Brazilian antitrust authorities, and the approval by the shareholders of Ultrapar, pursuant to article 256 of the Brazilian Corporate Law, and of Petrobras, pursuant to its bylaws, both meetings to be called in due course. The completion is also subject to other customary conditions precedent for this type of Transaction. It is worth mentioning that, even if paragraph 2 of article 256 of the Brazilian Corporate Law is applicable, Ultrapar shareholders will not be entitled with withdrawal rights, once Ultrapar’s shares have market liquidity and dispersion.
Liquigás was founded in 1953 and operates in the liquefied petroleum gas (LPG) distribution market in Brazil. With a structure of 23 operating facilities and 19 warehouses, Liquigás has a network of 4.8 thousand resellers.
In 2015, Liquigás sold 1.65 million tons of LPG, generating net revenues of R$ 3.3 billion and EBITDA of R$ 214 million. Liquigás’ gross debt as of December 31, 2015 was R$ 145 million.
Rationale of the acquisition
Ultragaz was the first LPG distributor in Brazil, founded in 1937, and will complete 80 years of operations next year. Its experience, pioneering spirit and commitment to this market all have allowed it to obtain various recognitions, including more than 40 awards for its management standards. Ultragaz serves approximately 11 million households in
the bottled segment and 50 thousand costumers in the bulk segment. In 2015, it sold 1.7 million tons of LPG, generating net revenues of R$ 4.6 billion and EBITDA of R$ 357 million. Over the last 12 months up to September 30, 2016, Ultragaz’s EBITDA totaled R$ 433 million. During 2016, Ultragaz reported 31% EBITDA growth year-on-year. In the same period, Liquigás has also been presenting even higher earnings growth.
Ultragaz strategy relies on differentiation based on innovation, offering costumers greater convenience and a better value proposition. This differentiation is materialized through initiatives such as the Ultragaz Connect application, Vale Gás, the partnership with the Km de Vantagens loyalty program and the Ultrapronto concept. Additionally, in the bulk segment, Ultragaz offers tailor-made solutions that enhance its costumer’s energy source towards the LPG use.
The Transaction will allow Ultragaz’s strategy based on differentiation and operational excellence, as well as its investment capacity, combined with Liquigás’ quality assets and reseller’s network, to provide significant efficiency gains, such as in logistics, in administrative management and in operating practices, resulting in better services and benefits for consumers, resellers and the society as a whole.
André Pires de Oliveira Dias
Chief Financial and Investor Relations Officer
Ultrapar Participações S.A.