This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Gafisa Initiates Studies To Separate Business Units Into Two Independent Publicly Traded Companies

GAFISA S.A. (Bovespa: GFSA3; NYSE: GFA) (“ Gafisa”, including all its affiliates or “ Company”) hereby discloses to its shareholders and the market that its Board of Directors has authorized the Company’s management to initiate studies for a potential separation (“Separation”) of the Gafisa and Tenda business units (“Companies”) into two independent publicly traded companies.

The Separation would be the next step in a comprehensive plan initiated by management to enhance value creation for the Company and its shareholders. The Companies have distinct strategic, operational and optimal financing profiles. Gafisa is a well-established operation, focused on the medium to high income classes, with a proven business model and a leadership position in its target markets (São Paulo and Rio de Janeiro). Tenda recently reinitiated launches under a new business model and is one of the few companies operating within the Level 2 segment of the Federal Government sponsored “Minha Casa Minha Vida” program, a segment with high growth potential. Additionally, the current synergies between the companies are minimal.

The main objectives of the Separation would be to:

i) Allow shareholders to allocate resources between the two Companies based on their own interests and investment strategies;

ii) Enable each of the Companies to respond faster to opportunities in their respective target markets;

iii) Establish sustainable capital structures for each of the Companies based on each unique risk profile, and allocate resources according to their strategic priorities;

iv) Provide more visibility to the market regarding the individual performance of each of the Companies, enabling better evaluation of inherent value;

v) Increase their ability to attract and retain talent by developing their respective appropriate culture and compensation plans which should be consistent with their different stages and lines of business and better aligned with the results of each business.

As an initial step to facilitate and accelerate the development of more appropriate operating structures for each of Gafisa and Tenda, the Company’s Board of Directors approved the division of their administrative structures, creating two operationally independent companies. The initial phase of this transition process will be led by Gafisa´s current Chief Executive Officer, Alceu Duilio Calciolari. It should last approximately 90 days after which period Duilio has decided to leave the presidency. Duilio joined the Company in 2000 as Chief Financial Officer. He became CEO in 2011 and has spearheaded and concluded the Company’s turnaround strategy, which resulted in its strategic repositioning, the rebalancing of its capital structure through the successful sale of 70% of Alphaville and the redefinition of Gafisa’s operating and corporate model.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,135.72 +38.82 0.21%
S&P 500 2,101.04 +2.51 0.12%
NASDAQ 4,982.8090 +15.6680 0.32%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs