Anhanguera Educacional Participações S.A.

Publicly Held Company
Corporate Taxpayer ID. (CNPJ/MF):
04.310.392/0001-46
Company Registry (NIRE): 35.300.184.092

Kroton Educacional S.A.

Publicly Held Company
Corporate Taxpayer ID. (CNPJ/MF):
02.800.026/0001-40
Company Registry (NIRE): 31.300.025.187

Material Fact

In accordance with CVM Instruction 358/2002 and complementing the material fact notice published on April 22, 2013, Anhanguera Educacional Participações S.A. (BM&FBovespa: AEDU3 "Anhanguera") and Kroton Educacional S.A. (BM&FBovespa: KROT3 "Kroton") and, jointly with Anhanguera, the "Companies," announce to their respective shareholders and to the market that, on May 7, 2014, the Companies executed an amendment to the association agreement ("Association Agreement") entered into by the Companies on April 20, 2013 ("New Amendment").
The New Amendment establishes that the Companies agree to adjust the exchange ratio applied to the merger of the stock issued by Anhanguera into Kroton, in accordance with Article 252 of Brazilian Corporation Law. The new exchange ratio negotiated between the Companies will result in the attribution of 0.30970293 common share issued by Kroton to each common share issued by Anhanguera, provided that the stock merger is approved by the Shareholders' Meeting of both companies.
Furthermore, the Companies agree that, in addition to the minimum mandatory dividend provided for in its Bylaws, Kroton may distribute to its shareholders in the form of dividends, prior to or simultaneously with the completion of the stock merger, up to 100% of the net income determined by Kroton and distributable to its shareholders up to the first quarter of
2014, limited to the total amount of R$483 million.
After the stock merger is completed, the control of the Companies will remain disperse and the shares of the combined company will be held by the shareholders of Anhanguera and by the shareholders of Kroton in the proportion of approximately 33.5% and 66.5%, respectively. For the purpose of merging the stock of Anhanguera, Kroton will issue 135,362,103 new shares to the shareholders of Anhanguera, observing the new exchange ratio indicated above.
Furthermore, the Companies also agree to assume in the New Amendment the obligation, among others, to not make, propose or carry out any unsolicited acquisition measure or offer or that could be considered hostile to the other Company or to its shareholders ("Hostile Offer") for a period of three years if the stock merger is not approved by the meeting of shareholders of one of the Companies. The New Amendment establishes that any transaction carried out in violation of the obligations to not make, propose or carry out a Hostile Offer will be invalid and subject the company in violation to the payment of a fine. The restriction on making a Hostile Offer will apply only to the Company whose meeting of shareholders has rejected the proposal for the stock merger.
Lastly, the Companies inform that they will continue to pursue a solution negotiated with the Administrative Court of Brazil's antitrust agency CADE (Conselho Administrativo de Defesa Econômica) that includes remedies for the antitrust concerns identified with regard to the offering of on-campus postsecondary education services and of postsecondary distance learning education services with the objective of obtaining approval for the Association Agreement within the legal time period.
In the negotiation of the Amendment, Anhanguera was advised by Banco Itaú BBA S.A. and
Kroton was advised by Banco BTG Pactual S.A.
May 7, 2014

Vitor Pini

Investor Relations Officer
Anhanguera Educacional Participações S.A.

Carlos Alberto Bolina Lazar Investor Relations Officer Kroton Educacional S.A.
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