Indicate by check mark whether the registrant by furnishing the information contained in this Form 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____CPFL Energia announces acquisition of 32.69% (1) Share of RGE |
São Paulo, May 10, 2006 CPFL Energia signed a purchase agreement with PSEG today for the direct acquisition of 100% of Ipê Energia Ltda., PSEG Brasil Ltda. and PSEG Trader S.A.
After the acquisition, the CPFL Group will own a total of 99.76% (1) of RGE and 99.95% of Sul Geradora. The company already owns 67.07% (1) of RGE and 67.20% of Sul Geradora through two of its subsidiaries, CPFL Paulista and CPFL Brasil. Through its acquisition of Ipê Energia Ltda., CPFL Energia will acquire a 32.69% (1) share of RGE and a 32.75% share of Sul Geradora. The purchase of these assets is in line with the companys growth strategy, and it strengthens CPFL Energias position as a player in the process of consolidation in the industry, affirmed Wilson Ferreira Junior, Chief Executive Officer of CPFL Energia.
RGE operates in the north of the state of Rio Grande do Sul, where some of the states most important economic enterprises are located, including those involved in producing food, rubber, plastic, metal goods and automobiles. RGE has 1,095,000 customers and a 2.4% share of the Brazilian electric energy distribution market. In 2005(2), its gross revenue reached R$2.2 billion, with EBITDA of R$313.8 million and net profit of R$113.7 million, 269.6% higher than net profit in 2004. With this acquisition, CPFL Energia will hold a 12.4% share of the market(3).
The value of the acquisition of 100% of Ipê Energia Ltda., PSEG Brasil Ltda. and PSEG Trader S.A. is U.S.$185 million. This acquisition has an expect return aligned with the current CPFL Energia business portfolio. It is important to note some of the financial aspects of the transaction, such as the EV/EBITDA index. Considering 2005 financial information for the two companies, the EV/EBITDA index for RGE was 5.3x and 8.7x for CPFL Energia.
1 Not including shares held in treasury.
2 Source: RGE
3 Based on energy sales
Comparison of Principal Financial Indicators
2005 Indicators | ||||
CPFL Energia | RGE | |||
EV/ EBITDA | 8.7x | 5.3x | ||
Equity/ EBITDA | 6.3x | 3.3x | ||
Price/ Earnings | 13.2x | 9.1x | ||
Price/ Book Value | 2.8x | 0.9x | ||
The transaction is still pending regulatory authorities approval.
INVESTOR RELATIONS
José Filippo IRO | ||
Vitor Fagá de Almeida IRM | E-mail: | Tel.: (55 19) 3756-6083 |
Alessandra Munhoz Andretta Coordinator | ||
Silvia Emanoele P. de Paula - Coordinator | ||
Adriana M. Sarinho Ribeiro | ri@cpfl.com.br | Fax: (55 19) 3756-6089 |
Juliene Corrêa Rodrigues | ||
Luis Fernando Castro de Abreu | ||
Thiago Piffer |
ri.cpfl.com.br
CPFL Energia is the largest private corporation in the Brazilian electric sector, active in distribution, commercialization and power generation. CPFL is the only private company in the Brazilian electric sector trading shares simultaneously on the Novo Mercado Bovespa and the New York Stock Exchange, with level III ADRs. The company strategy is focused on operational efficiency, growth with synergy between business units, financial discipline and practices of sustainability, social responsibility and differentiated corporate governance. |
CPFL ENERGIA S.A.
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By: /S/
JOSÉ ANTONIO DE ALMEIDA FILIPPO
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Name: José Antonio de Almeida Filippo
Title: Chief Financial Officer and Head of Investor Relations
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