MATERIAL FACT
Pursuant to article 157, paragraph 4, of Law 6404/76, as amended (“Brazilian Corporate Law”), and CVM Instruction 358/02, as amended, Kroton Educacional S.A. (“Kroton” or “Company”) informs its shareholders and the market in general that, on July 14, 2011, its fully owned subsidiary Editora e Distribuidora Educacional S.A. (“Editora”) acquired all the membership interests of União de Ensino de Vila Velha Ltda. (“Institution”), the controlling institution of Faculdade Educacional de Ponta Grossa - União (“Acquisition”), which has an operation in the municipality of Ponta Grossa, in the State of Paraná.
Pursuant to the Agreement of Purchase and Sale of Membership Interests and Other Covenants entered into on July 14, 2011 (“Agreement”), the Editora will pay to the sellers of the Institution (“Sellers”) the enterprise value in the amount of R$8,000,000.00 less the Institution’s debt on closing date, which totaled R$150,000.00 (“Net Debt”), resulting in a price of R$7,850,000.00 (“Price”). The amount of R$4,710,000.00, equivalent to 60% of the Price was paid cash to the Sellers and the remaining amount will be paid in five years. This amount will be subject to monetary restatement and possible withholdings and compensations resulting from the Institution‘s liabilities that are the responsibility of the Sellers, pursuant to the Agreement.
The Institution currently has 1,486 students enrolled in the municipality of Ponta Grossa (PR) and 2,500 vacancies, including Law and Administration courses. This acquisition is in line with the purpose of strengthening the Company’s presence in the state of Paraná, where it currently has an operation.
Kroton will have 40 campuses, operating in 29 municipalities distributed in 9 states. The Acquisition will be subject to the appreciation of Brazilian anti-trust authorities.
Finally, for the purposes of article 256 of Brazilian Corporate Law, (i) the contracting of the Price does not represent a relevant investment, and (ii) the Company is currently contracting a specialized company to verify if any of the criteria established in item II of article 256 of Brazilian Corporate Law has been exceeded, in which case the Acquisition will be submitted to ratification by the Company’s Shareholders’ Meeting. If a Shareholders‘ Meeting is necessary to ratify the Acquisition, the Company will disclose at an opportune time the terms and conditions for the exercise of withdrawal rights by dissenting shareholders. If none of the criteria established in item II of article 256 of Brazilian Corporate Law has been exceeded as a result of the Acquisition, a Shareholders‘ Meeting will not be held to ratify the operation.
Belo Horizonte, July 14, 2011
Carlos Alberto Bolina Lazar
Investor Relations Officer
For more information, please contact the Investor Relations department:
Carlos Lazar - IR Officer
Phillipe Casale - Analyst
Telephones: + 55 (11) 3775-2288 or + 55 (11) 3775-2003
E-mail: dri@kroton.com.br
www.kroton.com.br/ir
ABOUT KROTON
Kroton Educacional S.A. is one of the largest private for-profit educational organizations in Brazil. With over 45 years of operations, the company has a unique business model and an innovative academic project. It is present in 29 cities in 9 states and has 40 Post Secondary Education campuses with over 92,000 enrolled students, as well as around 280,000 Primary and Secondary education students in 771 Associated Schools in the private sector and 4 municipalities in the public sector.