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Material Fact - New proposal for the combination of the businesses

Recife, June 29, 2016 - Ser Educacional S.A. (BM&FBOVESPA SEER3, Bloomberg SEER3:BZ and Reuters SEER3.SA), one of the largest private groups of higher education in Brazil and leader in the Northeast and North regions, in compliance with the provisions of Article 157, Paragraph 4, of Law No. 6404 of December 15, 1976, as amended ("Brazilian Corporations Law"), and CVM Instruction No. 358, of January 3, 2002, as amended, regarding the transaction addressed by the Material Fact published on June 5, 2016, hereby announces that it has presented on this date to the Board of Directors of Estácio Participações S.A. ("Estácio" and, together with Ser Educacional, "Companies") a binding proposal for the business combination of the two companies ("Combined Company" and "New Proposal", respectively).

The main conditions of the New Proposal are:

  1. the distribution of extraordinary dividends to the current shareholders of Estácio in the amount of up to R$1 billion (equivalent to 29.3% of the market value of Estácio on June 1st, 2016), representing approximately R$3.25¹ per share of Estácio; and
  2. the Combined Company would have a stake of Estácio‘s current shareholders of 68.7% and of Ser Educacional‘s current shareholders of 31.3% of its total share capital, based on the proposed exchange ratio.

The Board of Directors of Ser Educacional will appoint the CEO (Chief Executive Officer) of the Combined Company and the CEO, in turn, will appoint the other members of the Executive Board.

Considering that Ser Educacional is an operating company, responsible for the maintenance of the higher education institutions and not only a holding company, the New Proposal will be implemented through a merger and the consequent absorption of Estácio by Ser Educacional, which would succeed all its rights and obligations, as provided for in Article 227 of the Brazilian Corporations Law.

In order to illustrate the theoretical potential for value creation from the combination of the companies, based on public information, Ser Educacional prepared the following analysis on the potential appreciation of Estácio‘s shares:

¹ Considering that, on the date of transaction‘s consummation, there will be 307,841,339 Estácio‘s shares, already deducting shares in treasury and ignoring any options granted in the context of long-term incentive plans of Estácio.

The New Proposal also emphasizes that it is of utmost importance that the Board of Directors of Estácio, when assessing the proposals and formulating its recommendation to its shareholders, take into account the different regulatory risks involved in all proposals submitted to Estácio, which could delay its closure, reducing the benefits that would be generated to the shareholders of the Companies through the Combination. Ser Educacional highlights that it still believes that the transaction described in its proposal can be implemented swiftly and without relevant regulatory challenges.

The New Proposal is valid until July 8, 2016 at 6:00 p.m. and is conditioned, in addition to the acceptance of its terms, to: the approval by the Board of Directors and by shareholders‘ meetings of both companies; the approval by the government and regulatory agencies; as well as the negotiation of the usual closing conditions for similar transactions, including the non-occurrence of material adverse changes in the market conditions or in Estácio‘s business.

If the New Proposal is accepted, the Management of Ser Educacional will immediately begin to work on the transaction’s implementation.

Additional disclosures to the market will be made in accordance with the current legislation.

Please click here to access the full document.

IR Contact:
Rodrigo de Macedo Alves and Geraldo Soares de Oliveira Júnior
(+55 11) 2769 3223 | ri@sereducacional.com | www.sereducacional.com/ri

Media Relations:

Silvia Fragoso
(+55 81) 3413-4643 | silvia.fragoso@sereducacional.com

About Grupo Ser Educacional
Founded in 2003 and headquartered in Recife, Grupo Ser Educacional (BM&FBOVESPA SEER3, Bloomberg SEER3:BZ and Reuters SEER3.SA) is one of the largest private education groups in Brazil and the leader in the Northeast and North regions in the number of students enrolled. The Company offers undergraduate, graduate, technical and distance-learning courses and is present in 12 states with a consolidated base of over 151,000 students. The Company operates under the Faculdades Maurício de Nassau, UNINASSAU - Centro Universitário Maurício de Nassau, Faculdades Joaquim Nabuco, Escola Técnica Joaquim Nabuco, Escola Técnica Maurício de Nassau, FIT - Faculdades Integradas dos Tapajós, UnG (Universidade Guarulhos) and UNAMA (Universidade da Amazônia) brands, through which it offers more than 915 courses.