Acquisitions and Joint Ventures

Turkey

Líder Metalfrio

In February 2006, Metalfrio entered into a joint venture with the OzLíder group for the installation of a production facility in Manisa, Turkey, in order to serve the European market. This unit allows Metalfrio to benefit from the lack of trade barriers for sales from Turkey within Europe and from Turkey’s proximity to the European market. In addition, the Company enjoy access to the high number of suppliers in the region and competitive costs of labor, equipment parts, raw materials and shipping.

Metalfrio’s Turkish production facility became operational in January 2007, with a production capacity of 160,000 units per year, based on three production shifts. During the last quarter of 2006, the Company transferred the equipment of the upright freezers production line from its facility in Aalestrup, Denmark, to its Turkish facility, which allowed Metalfrio to save on costs for purchasing and assembling new equipment for its Turkish production line, thereby significantly reducing its start-up costs for this production facility.

Acquisition of Senocak and Klimasan

In March 2008, Metalfrio acquired 71% of the capital stock of Senocak, a holding company that owns Klimasan, an operating company involved in the manufacturing and sale of refrigeration equipment in Turkey, Ukraine and Russia, for a total price of €46.0 million. 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, triggered by its acquisition of the indirect control of Klimasan through Senocak. By means of such tender offer, Metalfrio acquired an additional 12.5% stake in Klimasan’s capital stock for a total price of TRL10.5 million, corresponding to US$6.5 million.

Senocak operates through its subsidiaries in the retail market for commercial refrigeration equipment in Turkey, Ukraine and Russia, in addition to having other investments in Turkey. Its solid position in the markets of Turkey, Ukraine and Eastern Europe significantly contributed to its advancement in those markets. This acquisition allowed Metalfrio to integrate its operations in Russia and Denmark and its former operations in Turkey, carried out by Líder Metalfrio with the operations of the Senocak group, benefiting from synergies, optimizing its industrial operations and maximizing its commercial structure.

Senocak currently holds, directly and indirectly: (i) shares representing 61.0% of the total capital stock of Klimasan; (ii) 99.9% of the total capital stock of Senocak Sogutma; (iii) 100.0% of the total capital stock of Klimasan Ukraine; and (iv) 90.0% of the total capital stock of Klimasan Russia. In May 2011, the Company acquired 29% of the capital stock of the Turkish company Senocak Holding S.A., which is the remaining interest, for €15.8 million.

Klimasan has an industrial facility in Manisa, close to Izmir, one of the main ports in Turkey. Such facility is equipped with modern production lines, holding ISO 9000 certification, and a production capacity of 400,000 units per year in two production shifts. The acquisition of Metalfrio Turkey was intended to consolidate its presence in Eastern Europe and in member countries of the former Soviet Union, by giving Metalfrio access to production lines and technologies that complement theirs. Additionally, this acquisition allows Metalfrio to benefit from synergies in the manufacturing process and administrative structure.

Top

Denmark

Acquisition of assets of Caravell/Derby - Denmark

The Caravell/Derby group was among the main market players worldwide in the global industry of plug-in commercial refrigerators, with significant penetration in the segment of ice cream refrigeration in Scandinavia, Eastern Europe (mainly Russia), and the U.S. and Australian markets. Due to its environmentally-responsible production, state-of-art technology and network of 111 distributors in the five continents, the Caravell brand has worldwide recognition, with solid operations in Europe and the United States, in view of the quality, design and technology of its products.

In July 2006, Metalfrio purchased from the Caravell/Derby group: (i) assets relating to the production of upright and horizontal freezers from the industrial facilities located in Aalestrup and Løgstrup, Denmark; (ii) the inventories of raw materials and finished products (for about 17.0% and 60% of their book value for the raw materials and finished products respectively); (iii) certain patents and international trademarks (including Caravell, Derby, Gram and Esta); (iv) 80.0% of the capital stock of Metalfrio Russia, which holds an industrial facility in Kaliningrad, Russia, and (v) certain receivables owed by Caravell USA.

The purchase of these assets gave Metalfrio access to the state-of-art technology and design of the Caravell/Derby group products, a distribution network and post-sale service capabilities in Western Europe, Russia, Eastern Europe and Australia, in addition to the group’s operations in Russia.

Top

Russia

Metalfrio Russia

In conjunction with the purchase of the assets of the Caravell/Derby group, Metalfrio purchased an 80.0% stake in the capital stock of Metalfrio Russia, which was a Danish holding company holding an 80.0% stake in the Caravell/Derby group’s operations in Kaliningrad, Russia, through a joint venture with the IO Fund.

In 2008, Metalfrio started producing upright freezers and refrigerators in Russia. The industrial facility in Kaliningrad is located in close proximity to customers in the Eastern European market, and benefits from both tax incentives and competitive costs of labor, equipment parts, raw materials, shipping and tax incentives.

Top

United States

Acquisition of assets of Caravell USA

In December 2006, Metalfrio purchased Coldmotion’s assets related to the sale of plug-in refrigeration products, along with Caravell USA’s assets (including a distribution center located in the state of Texas and the Caravell USA brand) and RPS’s assets related to the provision of maintenance services for plug-in commercial refrigerators in the United States. After those purchases, the assets were transferred to Metalfrio USA.

This acquisition had an important role in its product distribution in the U.S. market, providing Metalfrio with customer relationships, a distribution network and post-sale support service capabilities.

Top

Mexico

Acquisition of Refrigeración Nieto

In April 2007, Metalfrio purchased 100.0% of the capital stock of Refrigeración Nieto.

This acquisition represents an important step in the consolidation of its leadership in the Latin American market, allowing Metalfrio to locally produce and rapidly grow in North America and in the Andean Pact region.

In April 2008, the operations of all its industrial facilities in Mexico, which included operations of Refrigeración Nieto in Celaya and Enerfreezer in Queretaro, were centralized in its industrial facility located in Celaya, providing for gains in its Mexican production process and in the administrative structure.

Acquisition of Enerfreezer

In August 2007, Metalfrio purchased from two financial investors 83.3% of the capital stock of Enerfreezer in Mexico.

The acquisition of Enerfreezer is complementary and beneficial to the successful consolidation of its operations in Mexico. Additionally, Metalfrio believes they can increase its sales in Mexico by selling to Enerfreezer’s customers.

Enerfreezer is currently a subsidiary of Metalfrio Solution S.A. de CV.

Future Acquisitions

Metalfrio closely monitor its industry in search of opportunities for the strategic acquisition of competitors, mainly in new markets.

In view of recent growth and current potential for growth in Asia, the Company plans to seek business opportunities mainly in this region. The increase in its current export volume, and its interest in consolidating its presence in the markets in which the Company operates and entering new markets where Metalfrio have little or no presence, led Metalfrio to begin evaluating acquisition opportunities in the Americas and Eastern Europe. However, Metalfrio cannot ensure that they will be able to identify opportunities for future acquisitions, or that Metalfrio will be successful in the negotiation of acquisition opportunities that the Company are able to identify.