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Material Fact - Capital Increase

Recife, September 12, 2017, Ser Educacional (B3 SEER3, Bloomberg SEER3:BZ and Reuters SEER3.SA), one of the largest private educational groups in Brazil and the leading entity in this segment in the North and Northeast regions, pursuant to Law No. 6,404 of December 15, 1976, as amended ("Brazilian Corporation Law") and in keeping with the rules set out by the Brazilian Securities Commission ("CVM"), notably CVM Ruling No. 358 of January 3, 2002, as amended, hereby advises its shareholders and the market in general that, in a meeting held on September 12, 2017, the Company‘s Board of Directors approved an increase in the Company‘s capital stock within its authorized limit, in the amount of at least R$236,586,672.00 and at most R$400,000,003.20, by way of issuance of common shares for private subscription, all of them being registered, in book-entry form and non-par ("Shares"), corresponding to at least 8,214,815 Shares ("Minimum Shares in the Capital Increase") and at most 13,888,889 Shares, it being permissible the occurrence of partial subscription followed by partial ratification of the capital increase in point upon actual subscription of new Shares corresponding to at least the Minimum Shares in the Capital Increase at the issue price of R$28.80 per Share, which was set as provided in article 170, paragraph 1, III of the Brazilian Corporation Law, the proceeds of which shall be fully allocated to the Company‘s capital stock ("Capital Increase").

The proceeds of the Capital Increase will be channeled into strengthening the Company‘s capital structure, including for purposes of financing the expansion of its business by way of (i) acquisitions, and (ii) investments in its organic growth, comprising an expansion in and the infrastructure of distance learning network capabilities as well as investments for the setup of new on-site learning centers.

As for the potential acquisitions referred to in item ‘i‘ above, and as indicated in its Reference Form (Formulário de Referência), the Company analyses from time to time, in the ordinary course of its business, any potential opportunities for acquisition of assets and companies to expand its business. In keeping with its strategy of business expansion via acquisitions, the Company is currently taking part in a competitive procedure for acquisition of a majority equity interest in a higher education institution, having thus recently signed a commitment by which it was assured of exclusivity rights during a preset period to carry out a due diligence investigation into the prospective asset and, should it be of interest to the Company, to put forward a binding proposal to acquire it. As this competitive procedure is currently at its preliminary stage, there is no assurance that such competitive procedure will have a successful outcome. Furthermore, as the closing of such competitive procedure is not expected to occur by the end of the current fiscal year (and, as such, until completion of the Capital Increase), the Capital Increase is not bound by or related to eventual closing of the aforementioned potential deal. The Company, in line with its disclosure policy, will keep its shareholders and the general market posted on the development of any negotiations involving the acquisition of material assets.

Moreover, on this date, the Company entered into with Mr. José Janguiê Bezerra Diniz ("Controlling Shareholder") and Banco de Investimentos Credit Suisse (Brasil) S.A. ("Financial Investor") an instrument by which the Financial Investor, for a fee, undertook a firm commitment to subscribe for and pay up as many as the Minimum Shares in the Capital Increase, subject to the terms and conditions spelled out in the documents executed with the Financial Investor. As an inducement for the Financial Investor to undertake and honor such subscription commitment, (A) the Controlling Shareholder will assign to the Financial Investor, free of charge, a preemptive right to subscribe within the context of the Capital Increase as many as 65,621,370 Shares held by the Controlling Shareholder; and (B) the Controlling Shareholder will lend to the Financial Investor, free of charge, 8,214,815 Shares held thereby so that the Financial Investor may avail itself of as many shares as it may deem necessary for hedging vis-à-vis the subscription commitment. The Financial Investor may trade in the market (including those Shares borrowed by it within the context of the lending transaction dealt with in item ‘B‘ above), at its sole discretion, as a way of hedging vis-à-vis the subscription commitment.

Moreover, the Company informs that it was advised by the Controlling Shareholder about his intention of selling, in the secondary market, up to 13,888,889 held thereby in the Company, representing 11.13% of the Company‘s capital stock (without considering the 377,500 treasury stocks). According to the Controlling Shareholder, the aforesaid sale(s) will take place on stock exchange and may be implemented even during the period established for exercise of preemptive rights accorded to the Company‘s shareholders in the Capital Increase, whether concurrently or not with any hedge transactions to be carried out by the Financial Investor as provided in the preceding paragraph.

For the purposes of this Material Fact and Notice to the Shareholders, "Business Day(s)" shall mean any day other than Saturdays, Sundays or national holidays, or else those when banks are not open for business in the City of São Paulo, State of São Paulo.

The Company will keep its shareholders and the market informed on the Capital Increase, according to prevailing regulations. For additional information, please contact the Company‘s Investor Relations Department by phone +55 (11) 2769-3223, or by e-mail ri@sereducacional.com.

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