ULTRAPAR HOLDINGS INC

Foreign Filer Report • Apr 14, 2007

6-K 1 dp05292_6k.htm Unassociated Document Licensed to: DPW Document Created using EDGARizer HTML 3.0.4.0 Copyright 2006 EDGARfilings, Ltd., an IEC company. All rights reserved EDGARfilings.com

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 April, 2007

Commission File Number: 001-14950

ULTRAPAR HOLDINGS INC.

(Translation of Registrant’s Name into English)

Avenida Brigadeiro Luis Antonio, 1343, 9º Andar

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. Valuation
Report - April 4, 2007

Item 1

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

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

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 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 by Brazillian Securities Regulation, in particular Rule #361/02 of the Brazillian Securities Commission ("CVM").

Disclaimer (continued)

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

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 presentation 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

Contents

| 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 underlying assets | | 22 |
| | A | Ultrapar | 26 |
| | B | Ultrapar
prior to the share merger | 37 |
| | C | CBPI
distribution | 39 |
| | D | DPPI
distribution | 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 | | 67 |
| II | Comparable
multiples | | 73 |

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, DBPI and RIPI shares in Ultrapar

n The ranges for the respective valuations of Ultrapar, CBPI, DBPI 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 the 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 | 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 | Un-levered
projections of cash flow to the firm Terminal
value calculation based on perpetuity growth
(Gordon’s growth model) or exit multiple Cash
flow and terminal value discounted by a discount
rate that corresponds to the Company’s Weighted
Average Cost of Capital (“WACC”) | Identification
of listed companies that are comparable
to the business being assessed Calculation
of value (TEV or equity) as a multiple
of value drivers (sales, ebitda, earnings,
etc.) Multiples
of value are applied to the corresponding
value driver of the Company being
assessed | Identification
of transactions involving companies
with comparable activities Calculation
of the implied multiples of value in those
transactions Multiples
of value are applied to the corresponding
value driver of the Company being
assessed |
| Potential advantages | Estimates
the intrinsic value of the Company Valuation
takes into consideration the risk-return profile
of the investment, and can be adjusted for the
country risk Takes
into consideration the company’s capital structure More
flexibility to incorporate expected changes in the
business profile such as change in product mix, capacity
expansion, etc. | In
efficient markets, it properly reflects the market
consensus of value of a given industry Reflects
historical performance and industry trends | Reflects
the implied value of transactions in a given
industry Might
have synergies imbedded in the valuation
multiples |
| Potential disadvantages | Subject
to different view of the Company’s future generation
of cash and risk Uncertainties
of longer forecasts | Difficulty
to identify companies that are comparable
to the asset being assessed Does
not reflect differences among the companies
such as capital structure, profitability,
management, etc Results
can be affected by adverse situations not
linked to valuation (macroeconomic, political,
etc.) | Difficulty
to identify companies/ transactions that
are comparable Characteristics
of the transaction might affect valuation
such as competitiveness of the sale process,
estimated synergies of the potential buyer,
defensive play, etc It
does not reflect the differences among the companies’
potential returns Limited
public information available |
| Considerations | Maximum
flexibility to incorporate in the valuation several
value drivers such as discount rate (driven by
capital structure, country risk, cost of equity), perpetuity
growth and expected performance (as opposed
to historical performance) | Limited
sample in the local market requires evaluator
to expand to different markets (normally
with different characteristics) Does
not incorporate specific nature of the company
being assessed Based
on historical performance, it incorporates market
trend | Limited
sample |
| Notes:
(1) TEV - Total Enterprise Value = Equity plus Net debt. | | | |

5

Executive summary Section 1

Deutsche Bank credentials

n Deutsche Bank and its affiliates provide a full range of investment banking products and services worldwide. The Corporate and Investment Bank (“CIB”) is responsible for providing capital markets products and investment banking services to corporations, financial institutions and governments and their agencies

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, the fairness opinion valuation of Companhia Siderúrgica Belgo Mineira in 2005, and the valuation report of Cia. Metalic Nordeste for Companhia Siderurgica 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

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

n In compliance with the resolution CVM #361/02, Deutsche Bank states that as of April 4, 2007:

– 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

7

Executive summary Section 1

Additional considerations (continued)

n The preparation of this Valuation Report was overseen by Ian Reid, Managing Director - Corporate Finance and Mergers & Acquisitions for Latin America. Selected advisory assignments in which Mr. Reid was involved include, among others:

– The merger of Brahma and Antarctica to form Ambev, the unwinding of CSN’s controlling interest in CVRD (advisor to CVRD), the acquisition of a Bolivian refinery by Petrobras (advisor to Petrobras), the sale of Latasa to Rexam by Bradesco, Alcoa and JP Morgan (advisor to sellers), the acquisition of Panamco by Coca- Cola FEMSA (advisor to Coca-Cola FEMSA), and the repurchase by FEMSA of Interbrew’s stake in Femsa Cerveza (advisor to FEMSA) among others

Ian Reid - Managing Director

8

Valuation summary Section 2

Section 2

Valuation summary

9

Valuation summary Section 2

Tab A

Ultrapar

10

Valuation summary Section 2

Ultrapar Participações S.A.

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.

• Total kilometrage traveled in 2006 was 43 million kilometers

Source: Public Ultrapar information

11

Valuation summary Section 2

Ultrapar valuation

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) R$890 million minus R$14 million 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

Source: FactSet

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 fuel distributor with a network of 3,324 stations 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 gasoline distributor with a network of 916 stations 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 2 nd 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 Ipiranga information

Note: Families include Gouvea, Tellechea, Mello, bastos, and Ormazabal families Source: Public Ipiranga information

14

Valuation summary Section 2

$$/page=

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
Opco | 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. Source:
Ipiranga 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 fuel in Southern Brazil

■ The Company delivers fuel to retail gas stations, industrial sites

■ Approximately 65% of volume is sold to retail gas stations

■ In 2006, core volume (gasoline, alcohol, and diesel fuel) 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 fuel distributor with a network of 3,324 stations 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 2 nd 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 Ipiranga 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
Opco | 706 | 100 % | 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 | | | | |
| Source:
Ipiranga 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 – DIPPI 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 fuel in Brazil , except in Rio Grande do Sul, Roraima and Amapá

■ The Company delivers fuel to retail gas stations, industrial sites

■ Approximately 65% of volume is sold to retail gas stations

■ In 2006, core volume (gasoline, alcohol, and diesel fuel) 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% of the Brazilian market

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

■ Ipiranga Petroquímica (IPQ)

• A 2 nd generation producer of high-end petrochemicals

• 2006 revenue of US$924.3 million and volume sold of 636,100 tons

• Through its ownership in IQ, CBPI, indirectly has a stake in IPQ and Copesul

■ 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 Ipiranga information

Corporate structure Note: Families include Gouvea, Tellechea, Mello, Bastos, and Ormazabal families

20

Valuation summary Section 2

CBPI valuation

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 |
| | – | Assumes
exchange rate of 2.1385 R$/US$ as of 12/31/2006 |
| | – | Models
projected in nominal reais; cash flows were converted to US Dollars
based
on average exchange rate for the year |
| | – | WACC
in
nominal US Dollars |
| | – | Considers
that cash flow is generated evenly throughout the year |
| 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 | | |
| | Companhia
Brasileira de Petróleo Ipiranga Distribuidora
de Prod. de Petróleo Ipiranga Copesul
Central Química Ipiranga
Petroquímica S.A. Ultrapar
Participações | |
| 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 | | |
| | Ipiranga
Química S.A. - precedent transactions Empresa
Carioca de Prod. Químicos S.A. - trading comps Ipiranga
Asfaltos - precedent transactions AM/PM
Comestíveis - trading comps Isa-Sul
Adm. e Part. Ltda - implied multiple from DPPI
DCF | |
| Source:
Ultrapar and Deutsche Bank | | |

23

Economic value of assets Section 3

Weighted Average Cost of Capital and Cost of Equity

WACC and Ke

WACC definition

(US$ nominal)

| | Ultrapar | Ipiranga
companies — 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: |
| --- |
| (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 |
| (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 |

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 (a) | 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 (a) | 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 (b) | 0.5% | 4.9% | 3.4% | 3.5% | 3.7% | 3.6% | 3.4% | 3.3% | 3.1% | 3.0% | 3.0% | 3.0% | 3.0% |
| GDP
- nominal growth | 5.7% | 10.9% | 6.6% | 7.4% | 7.8% | 7.2% | 7.0% | 6.9% | 6.7% | 6.6% | 6.6% | 6.6% | 6.6% |
| Brazilian
population growth (c) | 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
(IPC) (a) | 5.2% | 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) (b) | 23.0% | 16.4% | 15.3% | 12.2% | 11.1% | 10.0% | 9.5% | 9.5% | 9.5% | 9.5% | 9.5% | 9.5% | 9.5% |
| CDI
(Brazilian interbank rate) (b) | 23.5% | 16.9% | 15.8% | 12.7% | 11.6% | 10.5% | 10.0% | 10.0% | 10.0% | 10.0% | 10.0% | 10.0% | 10.0% |
| FX
rate - eop (d) | 2.85 | 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 | 3.05 | 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% |

Sources:

(a) Based on Wall Street consensus

(b) Market consensus for 2007 and 2008. Based on Wall Street consensus for 2009 onwards

(c) IBGE - Brazilian Institute of Geography and Statistics

(d) Market consensus for 2007 and 2008. Fixed purchase power parity (PPP) between Brazil and USA for 2009 onwards

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	–	–	130.4%	47.8%	8.3%	1.5%	3.0%	1.5%	9.0%	4.0%	9.8%

Note: Annual free cash flow in US$ millions

Effective tax rate based on the effective tax rates of Ultragaz, Oxiteno, and Ultracargo

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 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 volumes and adjusted for inflation

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 | 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 evolution 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 | | 2006 A | | 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

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 underlying 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)

| 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 | % | 11.5 | % |
| 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/ 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 underlying 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

Brazilian volume of core products (a) and CBPI market share

41

Economic value of underlying 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, 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

DPPI opco including Isa-Sul is valued at R$706 million, or US$330 million

| 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 | % | 11.1 | % |

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/ 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

Assumptions for the Brazilian fuel market are the same for CBPI and DPPI

Given its strong position in the region, DPPI presents little market share fluctuation

47

Economic value of assets Section 3

Assumptions – DPPI distribution (continued)

Selected income statement drivers

Revenues driven by volumes and contribution margin per product

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, 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

| 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 | % | (21.6 | %) |

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 2 nd generation producer of high-end petrochemicals

In 2006, volume sold reached 638,000 tons

| 1.
EBIT | 2007E — 87 | | 2008E — 89 | | 2009E — 86 | | 2010E — 73 | | 2011E — 83 | | 2012E — 79 | | 2013E — 86 | | 2014E — 96 | | 2015E — 106 | | 2016E — 104 | | Perp. — 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 | %) | (31.5 | %) |

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 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 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 underlying assets Section 3

Valuation summary - Other

| Company | | Description | TEV
(R$mm) | TEV/’06 — 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) | | | | |
| | n | Valuation
based on comparable trading companies | | |
| | n | A
chemical products distributor with over 5,000 clients in
50
different | | |
| Ipiranga
Química S.A. (IQ) | | markets | 176 | 8.6x |
| | n | Valuation
based on precedent transactions | | |
| | 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) | | | | |
| | n | Comparable
sample includes both specialty and commodity | | |
| | | petrochemical
trading companies | | |
| | n | A
producer of asphalt and pavement surface products | | |
| Ipiranga
Asfaltos (IASA) | | | 89 | 6.8x |
| | n | Valuation
based on precedent transactions | | |
| | n | A
retail convenience store chain attached to DPPI and CBPI
gas
stations, | | |
| AM/PM
Comestíveis | | consolidated
by CBPI | 236 | 7.5x |
| | n | Valuation
based on comparable trading companies | | |
| | 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 |
| | n | Valuation
based on the same implied multiple as DPPI | | |

Note: All valuation based on the median of the sample unless otherwise noted Calculation in US Dollars translated to Reais at 2.14 R$/US$

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

Terms used in the report

■	Beta: beta against the S&P500, a measure of systemic risk
■	Capital
Asset Pricing Model (CAPM): methodology used to define the cost
of equity
■	Capex: Capital Expenditures
■	Cost
of Equity (Ke): return required by the equity
holder
■	Cost
of debt(Kd): cost of third party
financing
■	CVM: Comissão de Valores Mobiliários
■	D&A: depreciation and amortization
■	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 (“bonus de subscricão”)
■	Drivers: value drivers or key drivers
■	EBIT: Earnings Before Interests and Taxes
■	EBITDA: Earnings Before Interest, Taxes, Depreciation and
Amortization
■	EV
or TEV: Enterprise value
■	Equity
value: TEV minus net debt
■	Dollar: American Dollar
■	DCF: Discounted cash flow
■	FCFF: Free Cash Flow to
Firm

| ■ | Operating
cash flow: relates to cash inflows and outflows solely related to
the operations |
| --- | --- |
| ■ | JCP :
interest on capital (“Juros sobre Capital Próprio”) |
| ■ | LTM :
Last twelve months |
| ■ | IPCA :
consumer price index |
| ■ | NOPLAT :
Net Operating Profit Less Adjusted Taxes |
| ■ | ON :
“Ação Ordinária” ordinary or voting share |
| ■ | PN :
“Ação Preferencial” preferred or non-voting share |
| ■ | ERP:
equity risk premium is the expected premium for investing in
stocks |
| ■ | CRP:
country risk premium is the expected premium for investing in
a certain
specific country |
| ■ | Spread :
price or yield differential |
| ■ | “ 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) |
| ■ | Risk
free rate: US Treasury |
| ■ | TJLP :
“Taxa de Juros de Longo Prazo”, Brazilian long term interest
rate |
| ■ | Terminal
value: : value of the company at the end of the
projection |
| ■ | NPV :
net present value |
| ■ | VPL :
vValor pPresente lLíquido |
| ■ | WACC :
Weighted Average Cost of
Capital |

65

Share price evolution Appendix I

Appendix I

Share price evolution

66

Share price evolution Appendix I

Weighted average share prices - LTM to announcement

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)

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

67

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

68

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

69

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

70

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

71

Comparable multiples Appendix II

Appendix II

Comparable multiples

72

Comparable multiples Appendix II

Selected comparable multiples - Petrochemicals

| Comparable
public company analysis - commodities | 3/14/2007 | Market | | TEV
/
EBITDA | | TEV
/
Sales | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Company
name | Share
price | Cap. | TEV | 2006A | 2007E | 2006A | 2007E |
| 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 | 5.5x | 5.6x | 0.8x | 0.8x |
| | | | Median | 5.2x | 5.4x | 0.8x | 0.8x |
| | | | Max | 6.4x | 6.6x | 1.1x | 1.0x |
| | | | Min | 4.7x | 4.9x | 0.5x | 0.5x |

Notes: All figures in US$ million unless otherwise noted.

Source: Companies information, FactSet and Bloomberg.

| Comparable
public company analysis - specialties | 3/14/2007 | Market | | TEV
/
EBITDA | | TEV
/
Sales | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Company
name | Share
price | Cap. | TEV | 2006A | 2007E | 2006A | 2007E |
| Clariant | $16.05 | 3,637 | 4,973 | 6.9x | 6.8x | 0.7x | 0.7x |
| Rhodia | $3.50 | 4,220 | 6,794 | 7.1x | 6.7x | 1.1x | 1.0x |
| Lubrizol | $51.10 | 3,601 | 4,665 | 8.2x | 7.7x | 1.2x | 1.1x |
| Huntsman | $18.94 | 4,433 | 7,432 | 7.7x | 6.4x | 0.8x | 0.8x |
| Celanese | $30.40 | 5,288 | 7,619 | 6.6x | 6.8x | 1.3x | 1.2x |
| | | | Mean | 7.3x | 6.9x | 1.0x | 1.0x |
| | | | Median | 7.1x | 6.8x | 1.1x | 1.0x |
| | | | Max | 8.2x | 7.7x | 1.3x | 1.2x |
| | | | Min | 6.6x | 6.4x | 0.7x | 0.7x |

Notes: All figures in US$ million unless otherwise noted. Sample based on surfactant chemical companies - specialty.

Source: Companies information, FactSet and Bloomberg.

73

Comparable multiples Appendix II

Selected comparable multiples - Chemical distributors & Retail Brazil

Precedent transaction analysis - Chemical distributors

| Target
- Buyer | Date | TEV | TEV/LTM — EBITDA | LTM
Metric — EBITDA |
| --- | --- | --- | --- | --- |
| ChemCentral
- Univar | Mar-07 | $650 | 9.3x | $70 |
| INT
Muellor Chemical - NIB Capital | Jun-01 | 228 | 8.8x | 26 |
| HCI
- Brenntag | Nov-00 | 306 | 8.5x | 36 |
| Ellis
& Everard - Vopak Distribution | Jan-01 | 480 | 6.1x | 79 |
| | | Mean | 8.2 x | |
| | | Median | 8.6 x | |
| | | Max | 9.3x | |
| | | Min | 6.1x | |

Notes: All figures in US$ million unless otherwise noted.

Source: Companies information, FactSet and Bloomberg.

Comparable public company analysis - Retail Brazil

| Company
name | Market — Cap. | TEV | TEV
/
EBITDA — 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.

74

Comparable multiples Appendix II

Selected comparable multiples - Refiners and Asphalt producers

Comparable public company analysis - Refiners

| Company | Share
price — 3/23/2007 | Market — Cap | TEV | TEV
/
EBITDA — 2006A | 2007E | 2008E | 2006A | Price
to earnings — 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.

Precedent transaction analysis - Asphalt producers

| Target
/
Buyer | Date | TEV | TEV
/ — LTM
EBITDA | TEV
/ — 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.

75

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:
April 13, 2007
By:	/s/ André
Covre
Name:	André
Covre
Title:	Chief
Financial and Investor Relations
Officer

(Valuation Report, April 4, 2007)