Gafisa S.A. Enters Into an Agreement to Sell 70% Stake in Alphaville to Blackstone and Pátria

  Gafisa S.A. Enters Into an Agreement to Sell 70% Stake in Alphaville to
  Blackstone and Pátria

         --- Cash Transaction Values Alphaville at R$2.01 billion ---

   --- Flexible Post-transaction Balance Sheet to Expand Gafisa Investment
                                 Capacity ---

--- Purchase of Outstanding 20% Stake in Alphaville for R$367 million in Cash
                                     ---

Business Wire

SÃO PAULO -- June 7, 2013

Gafisa S.A. (Bovespa: GFSA3; NYSE: GFA) (“Gafisa” or the “Company”), one of
Brazil’s leading diversified national homebuilders, today announced it has
signed an agreement to sell a majority stake in Alphaville Urbanismo S.A.
(“Alphaville” or “AUSA”), the leading urban community development company in
Brazil, valuing AUSA at an equity value of R$2.01 billion, to private equity
firms Blackstone Real Estate Advisors L.P. (“Blackstone”) and Pátria
Investimentos Ltda. (“Pátria Investimentos”). Gafisa also agreed to complete
the purchase of the outstanding 20% stake in Alphaville which it did not
already own, finalizing the arbitration process.

The sale to Blackstone and Pátria Investimentos will allow Gafisa to retain
30% of the company and generate expected gross cash proceeds of R$1.4 billion.
Blackstone and Pátria Investimentos will maintain the existing Alphaville
management team, led by Marcelo Willer, which has driven industry-leading
growth and returns at the brand. Following the transaction, Alphaville will
remain an affiliate to Gafisa and the Company will continue to play a
significant role in Alphaville, with representatives serving as directors on
the board with two out of six seats.

Additionally, Gafisa entered into an agreement with Alphaville’s founding
partners to complete the purchase of the outstanding 20% stake in Alphaville
for a total consideration of R$367 million.

Alphaville’s unique business model and highly recognized brand, combined with
Gafisa’s management oversight, have contributed to significant growth. Between
2007, the first year Alphaville was under Gafisa’s control and management, and
2012, launches increased more than fourfold from R$237 million to R$1.3
billion, while the average return on equity (ROE) for the period was 45% per
year.

Gafisa, through its advisors, initiated a strategic analysis for the
Alphaville business in September 2012. Options included an IPO of Alphaville,
the sale of a stake in this business or the maintenance of the existing
status. After careful consideration, the Gafisa Board of Directors together
with the senior management team determined that the sale of a majority stake
to the Blackstone and Pátria Investimentos would generate the highest
potential value for Gafisa shareholders and approved the transaction
agreement.

“This is a compelling opportunity to unlock the significant value that has
been created in Alphaville under Gafisa’s stewardship since its acquisition in
2006. The proceeds will strengthen Gafisa’s balance sheet by reducing leverage
and generate long-term shareholder value by capitalizing on the growth of our
high potential Gafisa and Tenda brands. These brands operate in expanding
markets and are poised for an improvement in profitability following a major
restructuring last year and the delivery of the majority of legacy projects in
2013. Furthermore, the transaction will allow our shareholders, through the
30% stake in Alphaville, to participate in the long-term value creation we
believe will be produced by partnering with two leading investment firms with
global and local experience in the real estate sector,” said Duilio
Calciolari, CEO of Gafisa Group.

Jonathan Gray, Global Head of Real Estate at Blackstone, said, “Blackstone is
pleased to announce its first joint real estate investment with Patria in
Brazil and to commit capital, alongside Gafisa and Patria, in Alphaville, a
well-managed, high potential Brazilian company, primed to capitalize on the
country’s increasing growth and development.”

“We are very pleased to announce this significant investment with Blackstone”,
said Olimpio Matarazzo, Patria's partner and co-founder. "And we are eager to
keep on searching for more opportunities of this relevance in the Brazilian
market."

Completion of the sale to Blackstone and Pátria Investimentos is subject to
closing conditions customary for a transaction of this nature, including
required anti-trust approvals, and is expected to occur in the second half of
the year. The table below indicates the estimated preliminary financial impact
post both transactions. Gafisa’s net debt to equity would decrease from the
94% reported at the end of the first quarter of 2013 to approximately 53%,
based on unaudited pro-forma data for the same period.

Gafisa Group Consolidated Unaudited Pro-forma Preliminary Selected Financial
Data (1Q13A versus 1Q13E)
                                          
R$ million            1Q13A   1Q13E   Change   Comments
                                               [cash inflow related to the
                                               sale] – [purchase of the
                                               outstanding 20% stake] –
Net debt              2,485   1,570   (915)    [estimated
                                               income tax] - [transaction
                                               costs] - [Alphaville net debt
                                               position]
                                               [Sale transaction profit] –
Equity                2,489   2,962   473      [transaction costs] -
                                               [estimated taxes]
                                               [adjustment to exclude the
Equity + Minorities   2,645   2,987   343      minority shareholders stake in
                                               Alphaville of 20%]
ND/Equity             94%     53%              Unaudited pro-forma preliminary
                                               estimated results

Note: 1Q13 A – Actual Results. 1Q13E – unaudited pro-forma preliminary
estimated results. Source: Company reports and estimates.

Gafisa Group’s flexible post-transaction balance sheet will increase the
Company’s investment capacity. The cash proceeds will reduce leverage and
remove financial constraints, thereby enabling greater focus on operational
performance and opportunities for organic growth. The reduction in net debt at
the Group level, and selective reinvestment in the Company’s high-potential
brands are expected to generate long-term shareholder value by capitalizing on
the growth potential of the business. The Gafisa Group’s profitability is
expected to improve following a major restructuring at Tenda last year and the
delivery in 2013 of the majority of lower margin Gafisa and Tenda projects
launched in non-core markets. Gafisa is focusing its investments on its core
markets, which continue to expand. These investments will require planned
capital spending over coming years.

Gafisa segment - The brand will maintain its focus on its core markets, namely
São Paulo and Rio de Janeiro, where performance has been strong due to brand
recognition, an established supplier network and experience accumulated during
a long history in these markets. Gafisa is well positioned to acquire
strategic land bank to grow the business. Given the high cost of entry into
what is a capital-intensive business segment, this transaction will strengthen
the Gafisa brand and make it a more competitive player, thus enhancing its
leading position in the market.

Tenda segment – Tenda’s operations will continue to expand in line with high
growth potential in the brand’s core markets of São Paulo, Rio de Janeiro,
Bahia and Minas Gerais. Throughout the past 18 months, the Company underwent a
substantial restructuring while results continued to be negatively impacted by
the resolution of the remaining Tenda projects. Still, having achieved control
of the operational and financial cycle at Tenda last year, the brand was
relaunched in the first quarter under a new, profitable business model. The
resumption of operations, which is proceeding in a cautious manner, is
expected to maximize the segment’s potential within the Group.

Alphaville segment - The Gafisa Group will continue to benefit from
Alphaville’s profitable operations and strong future prospects. By maintaining
minority ownership of Alphaville, the Group will benefit from its continued
growth in an attractive market, further strengthening Alphaville’s business
and brand. Currently, Alphaville has a sizable land bank with potential sales
of R$13 billion, thereby supporting the Company’s growth over the next years.

Upon completion of the acquisition of the outstanding 20% stake in Alphaville,
Mr. Renato de Albuquerque and Mr. Nuno Luís de Carvalho Lopes Alves will step
down as AUSA’s board members. Both executives made important contributions to
the success of Alphaville during their tenures on the board.

The Gafisa Group does not expect a change in the volume of launches defined in
our guidance until the end of 2013, at which point the long term business plan
and best use of funds from the transaction will have been evaluated.

Rothschild acted as financial advisor and Barbosa, Müssnich & Aragão (BM&A
Advogados) acted as legal counsel to Gafisa in the transaction. Stocche,
Forbes, Padis, Filizzola e Clápis and Simpson Thacher & Bartlett acted as
legal counsels to Pátria Investimentos and Blackstone.

Gafisa S.A.
André Bergstein
Chief Finance and Investor Relations Officer

About Gafisa

Gafisa is a leading diversified national homebuilder serving all demographic
segments of the Brazilian market. Established over 59 years ago, the Company
has completed and sold more than 1,000 developments and built more than 12
million square meters of housing only under Gafisa’s brand, more than any
other residential development company in Brazil. Recognized as one of the
foremost professionally managed homebuilders, "Gafisa" is also one of the most
respected and best-known brands in the real estate market, recognized among
potential homebuyers, borrowers, lenders, landowners, competitors, and
investors for its quality, consistency, and professionalism. Our pre-eminent
brands include Tenda, serving the affordable/entry level housing segment, and
Gafisa and Alphaville, which offer a variety of residential options to the mid
to higher-income segments. Gafisa S.A. is traded on the Novo Mercado of the
BM&FBOVESPA (BOVESPA:GFSA3) and on the New York Stock Exchange (NYSE:GFA).

About Blackstone:

Blackstone is a global leader in private equity real estate investing. Founded
in 1991, Blackstone’s real estate business is the largest opportunistic real
estate investment manager in the world, with more than $50 billion in investor
capital under management. Blackstone’s portfolio includes hotel, office,
retail, industrial and residential properties in the U.S., Europe and Asia.
Major holdings include: Hilton Worldwide, Equity Office Properties, Brixmor
shopping centers and London’s Broadgate office complex. Blackstone seeks to
create positive economic impact and long-term value for its investors, the
companies they invest in, the companies they advise and the broader global
economy. In addition to managing real estate private equity funds, our
alternative asset management businesses include the management of private
equity funds, hedge fund solutions, credit-focused funds and closed-end mutual
funds. Blackstone also provides various financial advisory services, including
financial and strategic advisory, restructuring and reorganization advisory
and fund placement services. Further information is available at
www.blackstone.com.

About Patria

With 25 years of experience, Patria Investimentos is one of the largest
alternative investment managers and corporate advisory firms in Brazil. It is
a pioneer in the private equity industry in this country, having gradually
expanded its portfolio with the development of new business like
infrastructure, real estate and capital management. Currently, Patria has over
US$ 7.5 billion in assets under management. It is the Brazilian partner of
Blackstone, the global leader in alternative investment management and
advisory services. Additional information available at:
www.patriainvestimentos.com.br

Contact:

Investor Relations
Gafisa S.A.
Luciana Doria Wilson
Telephone: +55 11 3025-9297 / 9242 / 9305
Fax: +55 11 3025-9348
ri@gafisa.com.br
www.gafisa.com.br/ri
or
Media Relations (Brazil)
Maquina da Notícia Comunicação Integrada
Fernando Kadaoka
Phone: +55 11 3147-7498
Fax: +55 11 3147-7900
fernando.kadaoka@maquina.inf.br
 
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