Southern Cross, Evercore Buying Mexican Homebuilder

Southern Cross Group and Evercore Mexico Capital Partners have agreed to acquire Mexican homebuilder Servicios Corporativos Javer, for an undisclosed amount. The deal is expected to close next month, pending regulatory approvals.

PRESS RELEASE
Southern Cross Group, Evercore Mexico Capital Partners (jointly the “Funds”) and Servicios Corporativos Javer, S.A.P.I de C.V. (“Javer” or the “Company”) announced today that they have signed an agreement by means of which the Funds acquire a controlling interest in the Company.

This transaction allows Javer, leader in the Mexican homebuilding sector, to incorporate strategic partners with proven financial and operating experience throughout the region. Javer, which plans to build more than 17,500 homes in 2009 and has land reserves in excess of 100,000 units, is one of the fastest growing developers of homes in the low, middle and residential segments in Mexico.

“The operating experience, strategic thinking and regional view of our new shareholders will contribute towards further consolidating Javer’s growth as we work towards becoming one of the country’s leading homebuilders and consider accessing the public equity markets,” stated Salomon Marcuschamer, founder of Javer.

This transaction does not involve any changes in the Company’s management, operating team or strategy. Roberto Russildi and Eugenio Garza, CEO and CFO respectively, will continue heading the Company’s operations as they, and the rest of the senior management team, have agreed to sign long-term employment contracts with incentives tied to the performance of the Company.

Salomon Marcuschamer, who will serve as Javer’s Honorary Chairman, will remain actively involved in the management of the Company particularly with respect to land acquisition and development. The Board of Directors will also include Ricardo Rodriguez, Cesar Perez Barnes and Sebastian Villa from Southern Cross Group, Pedro Aspe and Alfredo Castellanos from Evercore, Fernando Alvarez Neila, Joe Ackerman and independent board members to be appointed shortly after the closing. Ricardo Rodriguez will act as Chairman of the Board.

The new partners have a long-standing track record of achieving extraordinary investment returns by focusing on improving the operations of their portfolio companies while operating within very conservative leverage structures. The Funds do not intend to implement any fundamental changes in Javer’s overall business or financial strategy, especially with respect to leverage and dividend policies as the intention is to re-invest free cash flow to maximize growth. The transaction does not involve any modification of the cash balance or financial position at Javer.

Cesar Perez Barnes, Managing Director of Southern Cross, stated, “The incorporation of an investor group with long-standing, proven experience in the region will contribute significantly to consolidate the institutionalization of management and corporate governance procedures. We believe our capabilities perfectly complement Javer’s vision and that, together, we will continue maximizing the Company’s value within a general context of growth in the Mexican homebuilding sector.”

Homebuilding in Mexico is approximately a US$ 20 billion industry with annual demand for homes in excess of 800,000 units with over 720,000 mortgages granted each year(1).

“Our investment in Javer relies on solid fundamentals, in one of the most relevant sectors of the country’s economic activity. The market knowledge and business expertise of Javer’s executive management have allowed it to become a leader in the sector and is a testament of the company’s competitive position,” declared Pedro Aspe, Co-Chairman of Evercore.

Roberto Russildi, Javer’s CEO commented on the transaction, “At Javer we are honored by the fact that such well recognized investment firms chose to join us in what we foresee to be an unparalleled market opportunity. It is a true vote of confidence to what the company and our team have achieved to date. Their participation, together with that of Mr. Marcuschamer, provides a tremendous sponsorship umbrella that will guide us as we execute our business strategy which includes titling in excess of 45,000 homes over the next couple of years.”

The closing of this transaction, which is expected in November of this year, will require approval from Mexican regulatory authorities.

(1) Industry figures according to Infonavit and Softec; does not include the Vacational segment.

Southern Cross Group, a leading private equity fund in Latin America founded in 1998, has offices in Argentina, Brazil, Chile, Mexico and the United States. Its companies are worth more than $1.5 billion dollars and participate in various economic sectors such as retail, pharmaceutical, personal care products and household production, oil and gas exploration, hospitality, food distribution, generation thermal power, natural gas distribution and water services. Of its more than 20 transactions, the best known in the Mexican market include the acquisition of MMCinemas, the sale of Telex-Chile to Telmex, the sale of Construmega to Cemex and development of MorePharma. For additional information please visit: www.southerncrossgroup.com

Mexico Evercore Capital Partners is the private equity division of Protego and manages more than $125 million dollars. Its first investment was More Pharma; the investment in Javer will represent the second joint venture in Mexico Evercore Capital Partners with Southern Cross Group. Protego, founded in 1996 by Pedro Aspe, is a leader in investment banking advice. In 2006 it merged with Evercore, a leading US investment banking and investment management firm. Evercore has a presence in New York, Los Angeles, San Francisco, Boston, DC, Houston, London, Mexico City, Monterrey, Japan, Brazil, France and China. Other private equity investments in which Protego has participated are Volaris, Ike Assistance and Lipu.

Javer, based in Monterrey, Nuevo Leon, was founded in 1973 by Salomon Marcuschamer. It is one of the largest developers of low-income homes in Mexico. The company has a 19% market share in loans granted by Infonavit in the State of Nuevo Leon. It plans to build over 17,500 houses in 2009 and has land reserves in excess of 100,000 units. The company provides strong social support to the communities in which it participates through the installation of schools, medical centers, and sports complexes.

Disclaimer:

This press may include forward-looking statements. These forward-looking statements include, without limitation, those regarding Javer’s future financial position and results of operations, the Company’s strategy, plans, objectives, goals and targets, future developments in the markets in which Javer participates or are seeking to participate or anticipated regulatory changes in the markets in which Javer operates or intends to operate.

Javer cautions potential investors that forward looking statements are not guarantees of future performance and are based on numerous assumptions and that Javer’s actual results of operations, including the Company’s financial condition and liquidity and the development of the Mexican mortgage finance industry, may differ materially from the forward-looking statements contained in this press release. In addition, even if Javer’s results of operations are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods.

Important factors that could cause these differences include, but are not limited to: risks related to Javer’s competitive position; risks related to Javer’s business and Company’s strategy, Javer’s expectations about growth in demand for its products and services and to the Company’s business operations, financial condition and results of operations; access to funding sources, and the cost of the funding; changes in regulatory, administrative, political, fiscal or economic conditions, including fluctuations in interest rates and growth or diminution of the Mexican real estate and/or home mortgage market; increases in customer default rates; risks associated with market demand for and liquidity of the notes; foreign currency exchange fluctuations relative to the U.S. Dollar against the Mexican Peso; and risks related to Mexico’s social, political or economic environment.