History and Corporate Profile

Corporate Profile

Metalfrio Solutions S.A. is a Brazilian multinational corporation and one of the world’s largest manufacturers of plug-in commercial refrigeration equipment, particularly ice cold merchandiser (ICM) equipment.

The company is the leader in Latin America and in this industry, which includes both refrigerators and freezers, and it believes that are one of the fastest growing manufacturers of commercial refrigeration equipment in the world as measured by net revenue growth.

Metalfrio Solutions have sold refrigerators and upright and horizontal freezers since 1960, and according to a survey by Oxygen Trade their equipment is currently used by approximately 90% of retailers and other businesses that employ plug-in commercial refrigeration in Brazil., Metalfrio’s floor share in Brazil, as measured by installed units, was 38.4% in 2007.

The company’s product portfolio consists of 350 different models of horizontal and upright plug-in commercial refrigerators, with different applications, such as cooling beer and soft drinks and refrigerating ice cream and other products. In addition to their wide product portfolio, the Company provides to their customers "complete solutions," by offering a wide variety of services that includes the design, manufacturing and distribution of new products and post-sale services.

Metalfrio’s refrigerators are used as merchandising tools in bars, restaurants, bakeries, supermarkets, convenience stores and other venues that sell cold or frozen products to the public, serving as a marketing tool for their customers. For this reason, most of its products have customized designs to promote the logos and brand names of its customers.

The company has direct distributors and commercial representatives in 74 countries on five continents, and sells its products to the largest manufacturers of refrigerated food and beverage in the world. Metalfrio operates five industrial facilities, two of which are located in Brazil and one is in each of Turkey, Russia and Mexico, and one distribution center in the United States.

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History

The company’s history is linked to the establishment and development of the commercial refrigeration industry in Brazil. Metalfrio was incorporated in 1960 with the objective of manufacturing components for refrigeration systems, but shortly after changed our focus to meet the demand for refrigeration systems by producers of beverages and ice cream, which previously manufactured their own systems.

In 1989, Continental 2001, a manufacturer of household appliances and one of the leading Brazilian producers of stoves for domestic use at the time, acquired a majority stake in Metalfrio. Two years later, the German group Bosch Siemens Hausgerate, or BSH, acquired Continental 2001 and the remaining stake in Metalfrio’s capital stock. Subsequently, Metalfrio became a division of BSH, which made considerable investments to transform Metalfrio into the first environmentally responsible producer in its sector in Latin America. In 2000, BSH decided to transform Metalfrio into an independent subsidiary, and the Company were therefore established as Metalfrio Solutions Ltda. on December 3, 2001. As a result, all of Metalfrio’s assets were transferred to Metalfrio Solutions Ltda.

In January 2004, BSH sold Metalfrio. At that moment, the Company began a new chapter in their history. In order to establish the Company as one of the leading players in the plug-in commercial refrigeration industry by 2010, its new shareholders comprised of a group of Brazilian private investors with significant investment experience established a strategic plan for accelerated growth focused on increasing profitability by giving performance incentives to employees, reducing costs, increasing efficiency and product innovation, prioritizing expansion and internationalization and adopting best practices in corporate governance.

The Company also started to prioritize the creation of shareholder value. In 2004 Metalfrio achieved growth in its results of operations by orienting their business toward more profitable products and customer relationships.

Meanwhile, Metalfrio obtained quality certifications for its products in the main consumer markets in which Metalfrio operated, or intended to operate, and with its main international clients. The process for obtaining such certifications is usually rigorous and time-consuming, which Metalfrio believes acts as a market barrier for the entrance of new competitors.

In 2005, after its products were well received in Europe, Metalfrio decided to set up an industrial facility in Turkey for manufacturing refrigerators targeting for the European market. Such facility was established in 2006 through a joint venture with the OzLíder group.

In 2006, Metalfrio purchased assets in Denmark and Russia that were owned by the Caravell/Derby Group, a leading international producer in its industry.

Also in 2006, the Company inaugurated a new production facility in Três Lagoas, in the state of Mato Grosso do Sul, Brazil, in order to expand its production capacity to meet growing demand in the Brazilian and Latin American markets. Metalfrio also purchased assets, including a distribution center in the United States, from Caravell USA, one of the main distributors of the products of the Caravell/Derby Group in the U.S. market.

In December 2006, Metalfrio underwent a strategic restructuring of its operations, aimed at consolidating stakes in Life Cycle and Metalfrio Denmark into Metalfrio, which resulted in the transfer of certain assets to our Russian operations.

On January 19, 2007, Metalfrio became a corporation (sociedade por ações) in preparation for its initial public offering. In April 2007, the Company became a publicly-held corporation and completed its initial public offering that initially comprised a primary offering of 12.8 million common shares and a secondary offering of 7.9 million common shares. Due to an exercise of the over-allotment option Metalfrio had granted the underwriters, an additional 3.1 million common shares were offered. The total value of its initial public offering was R$453.0 million.

In April 2007, Metalfrio also acquired (i) 100.0% of the capital stock of Refrigeración Nieto, a traditional commercial refrigeration company in Mexico, (ii) certain real property in Mexico, and (iii) the right to use the Nieto and Silverfox trademarks for a 36-month period. Additionally, in August 2007 the Company expanded its presence in the Mexican market by means of the acquisition of 83.3% of the capital stock of Enerfreezer, which strengthened its relationship with important customers and allowed its Mexican operations to benefit from Enerfreezer’s experience.

In March 2008, Metalfrio acquired 71.0% of the capital stock of Senocak, a holding company that controls Klimasan, which operates in the manufacturing and sale of refrigeration equipment in Turkey, Ukraine and Russia, for a total price of €46.0 million (US$55.1). In February 2009, the Company completed a mandatory public tender offer to purchase all of the outstanding shares (approximately 22.0% of the capital stock) of Klimasan, a company controlled by Senocak, as a result of its acquisition of an indirect controlling stake in Klimasan through Senocak. The Company acquired an additional 12.5% of Klimasan’s capital stock for a total price of TRL10.5 million, corresponding to approximately US$6.5 million at the date of acquisition.

In April 2008, Metalfrio completed the second phase of expansion of its industrial facility located in Três Lagoas, in the state of Mato Grosso do Sul, Brazil, and, in 2009, began the third phase of expansion of such facility, the Company invested approximately R$4.0 million in such expansion, and they expect phase three to be concluded during the second half of 2010.

On April 30, 2009, at a general shareholders’ meeting, Metalfrio’s shareholders approved a decrease in its capital stock in the amount of R$101.4 million, as permitted by the Brazilian Corporate Law in order to offset the total losses incurred as of December 31, 2008.

In July 2010 the Company completed construction on the third phase of its plant at Três Lagoas, in the Brazilian state of Mato Grosso do Sul, and decided to transfer the horizontal freezer manufacturing activities from the São Paulo plant.

On July 2, 2010 Metalfrio issued a Market Announcement disclosing that, on that date, it had signed an agreement with the government of the Brazilian state of Pernambuco and with the municipality of Vitória de Santo Antão, in Pernambuco state, for the construction of a new plant, which will meet the growing demand for commercial refrigeration in the States of the North and Northeast of Brazil.