ANHANGUERA EDUCACIONAL PARTICIPACOES SA 
By
Anhanguera Educacional Participações S.A. - BM&FBovespa: AEDU3 ("Anhanguera") and Kroton Educacional S.A. - BM&FBovespa: KROT3 ("Kroton"), and, jointly with Anhanguera, the "Companies," in compliance with Instructions 358/2002 and 319/1999 issued by the Securities and Exchange Commission of Brazil (CVM), and complementing the Material Fact notices dated April 22, 2013, June
18, 2013, November 14, 2013, December 4, 2013, February 28, 2014, March 12, 2014, April 10, 2014, May 7, 2014 and May 14, 2014, announces the following:
With the objective of integrating the activities of the Companies, the proposal for the merger of the stock of Anhanguera into Kroton, by means of a capital increase at Kroton, as described below ("StockMerger"), will be submitted to their respective shareholders.
1. Reasons or purpose of the transaction and the interests of the Companies in its consummation.
1.1. Since Kroton and Anhanguera are engaged in activities and/or the administration of institutions in the postsecondary education, vocational education and other areas of education in Brazil, the Stock Merger aims to combine the companies and integrate their activities in the Brazilian education industry.
1.2. The Stock Merger will enable the combination of the assets, talents and skills of the Companies and the capture of synergies that are expected to further enhance the quality of the educational services offered by Kroton and Anhanguera and in turn generate significant benefits for the Companies, their shareholders, students and employees, and civil society.
2. Acts preceding the transaction.
2.1. The Companies entered into, on April 20, 2013, the Association Agreement and Other Covenants, as amended on April 25, 2013, June 18, 2013 and May 7, 2014 ("Association Agreement"), which established the terms and conditions for the association between the Companies, through the Stock Merger.
2.2. The Board of Directors of Kroton, in a meeting held on June 6, 2014, and the Board of Directors of Anhanguera, in a meeting held on the same date, approved the Stock Merger and authorized the execution of the Merger Agreement (as defined below), and approved the calling of the Extraordinary Shareholders' Meetings of the Companies to consider and vote on the Stock Merger.
2.3. On June 6, 2014, the managers of the Companies, with the intervention of the Companies, entered into the Agreement and Plan of Merger of the Stock of Anhanguera into Kroton ("Merger
Agreement").
2.4. The Audit Board of Kroton, in a meeting held on June 6, 2014, and the Audit Board of Anhanguera, in a meeting held on the same date, voted to recommend approval by the shareholders of the Companies of the Stock Merger, in accordance with the terms of said Merger Agreement.
2.5. Lastly, on the hereof, the Extraordinary Shareholders' Meetings of the Companies were called to consider and vote on the Stock Merger.
3. Exchange ratio, number and type of shares to be attributed to the shareholders of Anhanguera and the rights of the shares.
3.1. Based on studies and negotiations conducted between the managements of the Companies, the exchange ratio was set in such a way that, after the Stock Merger, 135,362,103 new registered, book- entry common shares without par value issued by Kroton ("New Shares") shall be attributed to the shareholders of Anhanguera. The exchange ratio was negotiated freely by the Companies and is considered fair and equitable to their shareholders, having taken into consideration the economic valuation of the stock of Kroton and Anhanguera, which indicated the attribution of 0.30970293 common share issued by Kroton for each common share issued by Anhanguera and merged into Kroton, resulting in the issue, by Kroton, of the New Shares.
3.2. The exchange ratio provided for in Item 3.1 above shall be adjusted proportionately in the event of a stock split, reverse stock split, stock bonus or any other event that causes a change in the number of shares comprising the capital stock of Anhanguera or Kroton without a respective change in their shareholder's equity.
3.3. Fractions of the shares issued by Kroton resulting from the exchange of positions of each shareholder of Anhanguera that are not combined with other shareholders of Anhanguera to form whole numbers of shares within 30 days as from the date of the consummation of the Stock Merger shall be gathered and sold on the BM&FBOVESPA S.A. - Securities, Commodities and Futures Exchange ("BM&FBOVESPA") by Kroton, and the respective amount, net of monetary restatement and other costs incurred, shall be paid by Kroton, in local currency, to the holders of the respective fractions proportionate to their interests in each share sold, within 30 business days as from the receipt of the proceeds arising from the sale.
3.4. The New Shares shall entitle their holders to the same rights and benefits attributed to the shares issued by Kroton currently outstanding, and the shareholders of Anhanguera shall participate fully in all benefits, including any dividends and interest on equity that comes to be declared by Kroton after
the Stock Merger, except for the dividends, in the amount of R$483,000,000.00, that will be declared
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by Kroton in the Meeting of the Board of Directors to be held on the same date of the Extraordinary Shareholders' Meeting of Kroton, which shall be calculated towards the minimum mandatory dividend for fiscal year 2014 of the stock issued by Kroton, in accordance with Paragraph 4, Article 40 of the bylaws of Kroton, with only the shareholders of Kroton prior to the Stock Merger entitled to these dividends. The effect produced by the vote regarding the declaration of dividends, in the amount of R$483,000,000.00, as described above, shall be subject to the consummation of the Stock Merger.
3.5. Kroton currently does not hold, nor will it hold immediately prior to the consummation of the Stock Merger, shares issued by Anhanguera. In the same way, Anhanguera currently does not hold, nor will it hold immediately prior to the consummation of the Stock Merger, shares issued by Kroton.
4. Criteria used to value the stock of Anhanguera, the valuator and the treatment of changes in equity.
4.1. The Management of Kroton hired Apsis Consultoria e Avaliações Ltda., a company headquartered in the City of Rio de Janeiro, State of Rio de Janeiro, at Rua da Assembleia, 35, 12º andar, registered in the roll of corporate taxpayers (CNPJ/MF) under number 08.681.365/0001-30 ("SpecializedCompany"), as the firm responsible for preparing the valuation report determining the book value of Anhanguera used to calculate the value of the shares issued by Anhanguera ("Valuation Report"), the appointment of which will be submitted for approval to the Extraordinary Shareholders' Meeting of Kroton, in accordance with Paragraph 1, Article 252 of Federal Law 6,404.
4.2. The Valuation Report was prepared based on the elements contained in the audited financial statements of Anhanguera ("Financial Statements of Anhanguera") dated December 31, 2013 ("BaseDate"). The Financial Statements of Anhanguera were audited by Ernst & Young Auditores Independentes S/S. According to the Valuation Report, the book value of the shares issued by Anhanguera to be merged into Kroton on the Base Date is R$2,327,298,047.40, which corresponds to book value per share of R$5.324762345.
4.3. The Specialized Company declared that (i) there are no conflicts or communion of interests, either current or potential, with the shareholders of Kroton or of Anhanguera or in connection with the actual Stock Merger; and (ii) the shareholders or managers of the Companies did not influence, limit, hinder or practice any acts that compromised or could have compromised the access to, use of or acquisition of information, assets, documents or work methods with regard to the quality of its conclusions.
4.4. The changes in equity that occur at Anhanguera as from the Base Date will be borne exclusively by Anhanguera and be reflected at Kroton as a result of the application of the equity accounting method.
4.5. The merger of the stock of Anhanguera into Kroton will result in an increase in the shareholder's equity of Kroton, with the consequent issue of the New Shares to be delivered to the shareholders of
Anhanguera in exchange for their current investment in Anhanguera.
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5. Composition of the capital stock of the Companies and restatement of the bylaws of Kroton.
5.1. On the date hereof, the capital stock of Anhanguera is R$1,876,773,869.63, divided into
437,070,783 registered common shares without par value.
5.2. On the date hereof, the capital stock of Kroton is R$1,867,228,658.00, divided into 268,703,876 registered common shares without par value.
5.3. If approved, the Stock Merger will cause the transfer of all shares issued by Anhanguera to the equity of Kroton and a consequent increase in its capital stock, and therefore result in Anhanguera becoming a wholly-owned subsidiary of Kroton.
5.4. As a result of the Stock Merger (i) the capital stock of Kroton shall be increased by R$2,327,298,047.40; and (ii) a total of 135,362,103 new registered common shares without par value of Kroton will be issued, with the head paragraph of Article 5 of the bylaws of Kroton coming into force with the following new wording:
"Article 5 - The capital stock of the Company is R$4,194,526,705.40, fully subscribed to and paid in, divided into 404,065,979 common shares, all book-entry, registered and without par value."
5.5. The new shares of Kroton issued as a result of the Stock Merger will be fully subscribed to by the managers of Anhanguera, on behalf of its shareholders, in accordance with Paragraph 2, Article 252 of Federal Law 6,404/76, and paid in upon transfer of ownership of the shares issued by Anhanguera to the equity of Kroton.
6. Right of Withdrawal.
6.1. The shareholders of Anhanguera and Kroton that vote against or abstain from voting in connection with the Stock Merger or that do not attend the respective Extraordinary Shareholders' Meetings of the Companies will not be entitled to the right of withdrawal, given the fact that the stock issued by Anhanguera and by Kroton will both enjoy, on the date of each Shareholders' Meeting, liquidity and broad dispersion in the market, in accordance with Paragraph 2, Article 252 and Item II, Article 137 of Federal Law 6,404/76.
7. CADE.
7.1. On May 14, 2014, the Association Agreement received final approval from Brazil's Antitrust Agency (Conselho Administrativo de Defesa Econômica) ("CADE") through the execution of a Merger Control Agreement (Acordo em Controle de Concentrações) ("ACC"), which consitutes Annex B of the Merger Agreement.
8. Costs.
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8.1. The management of the Companies estimate that the costs incurred to carry out the Stock Merger shall amount to approximately R$35 million, which includes the expenses with publication, auditors, valuators, attorneys and other professionals engaged to assist in the transaction.
9. Other information.
9.1. The consummation of the Stock Merger will depend on the realization of the following acts:
(a) The Extraordinary Shareholders' Meeting of Anhanguera that will consider and vote on waiving the requirement to hold a public tender offer for the stock of Anhanguera provided for in Article 24 of the bylaws of Anhanguera in connection with the Stock Merger;
(b) The Extraordinary Shareholders' Meeting of Anhanguera to approve (i) the Merger Agreement; (ii) the Stock Merger, in accordance with the terms and conditions of the Merger Agreement; and (iii) the execution, by the managers of Anhanguera, of all acts required for the Stock Merger, including the subscription to the capital increase of Kroton and the effective transfer of all common shares owned by the shareholders of Anhanguera into Kroton;
(c) The Extraordinary Shareholders' Meeting of Kroton, to be held simultaneously with the Extraordinary Shareholders' Meeting of Anhanguera cited in item (b) above, in order to: (i) approve the election of two new members to the Board of Directors of Kroton, in accordance with Item 9.1.2 below; (ii) approve the New Kroton Plan, in accordance with Item 9.2 below and its subitem, to receive the options granted and not exercised under the scope of the Anhanguera Plans (as defined below); (iii) approve the Merger Agreement; (iv) approve the hiring of the firm responsible for valuing the shares issued by Anhanguera to be merged into the equity of Kroton; (v) approve the valuation report; (vi) approve the Stock Merger, in accordance with the terms and conditions of the Merger Agreement; (vii) approve the capital increase of Kroton arising from the Stock Merger and the respective amendment and restatement of the bylaws of Kroton; (viii) approve the execution by the managers of Kroton of all acts required for the Stock Merger;
(d) Immediately after the Shareholders' Meeting of Kroton, provided the Stock Merger is approved at the Extraordinary Shareholders' Meeting of the Companies, a meeting of the Board of Directors of Kroton will be held that, in addition to the two directors indicated by Anhanguera in accordance with Item 9.1.2 below, shall (i) in accordance with Article 20 of the bylaws of Kroton, elect two directors to be indicated by Anhanguera by said date, who will hold the offices currently vacant on the Board of Directors of Kroton until the end of the term of office of the directors being replaced (i.e., through September 28, 2015), one of whom, Professor Gabriel Mario Rodrigues, shall be elected Chairman of the Board of Directors of Kroton until the end of the current term of office of the Board of Directors of Kroton, and the other being Mr. Antonio Carbonari Neto.
9.1.2. The management proposal for the Extraordinary Shareholders' Meeting of Kroton shall contain the proposal for election to the Board of Directors of Kroton of (i) Mr. Ricardo Leonel Scavazza; and
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(ii) of Mr. Valdemar Ottani, as the independent director selected by Kroton from a list of three names indicated by Anhanguera.
9.2. The Shareholders' Meeting of Kroton that approves the Stock Merger shall consider and vote on the approval of a new stock option plan of Kroton ("New Kroton Plan") to receive the options granted and not exercised (whether or not the vesting period has expired, provided they still may be exercised in accordance with the conditions of the Anhanguera Plans) under the scope of the stock option plans of Anhanguera approved in the Extraordinary Shareholders' Meetings of April 30, 2010 and March 11,
2013, respectively ("Anhanguera Plans"). The options received by Kroton under the scope of the New
Kroton Plan shall be replaced by stock options issued by Kroton, in an amount determined based on the application of the same exchange ratio proposed in the Stock Merger, in other words, 0.30970293 common share issued by Kroton for each common share issued by Anhanguera ("Exchange Ratio"), and will correspond to the issue of up to 6,520,299 common shares of Kroton in the future, if and when they are exercised. The total number of shares that may be acquired under the scope of this New Kroton Plan shall therefore not exceed 1.62% of the total number of shares representing the capital stock of Kroton after the Stock Merger during the duration of the New Kroton Plan, with this calculation considering all of the shares issued by Kroton as a result of the Stock Merger.
9.2.1. The exercise price of each option issued by Kroton to be granted to the participants of the Anhanguera Plans shall correspond to the exercise price of each option originally established under the Anhanguera Plans and the respective stock option agreements entered into with each participant of the Anhanguera Plans, adjusted by the Exchange Ratio so that there is no change in the total purchase amount of the options received to be paid by each of the beneficiaries after receiving the options from Kroton.
9.3. The registration as a listed company of Anhanguera will be maintained after the Stock Merger until a subsequent determination is made by its controlling shareholder Kroton. The stock issued by Anhanguera will cease to trade on the Novo Mercado listing segment of the BM&FBOVESPA after the consummation of the Stock Merger.
9.4. The Stock Merger will not cause Kroton to absorb any assets, rights, obligations, liabilities or responsibilities of Anhanguera, which shall maintain its own legal personality, with no occurrence of succession.
9.5. The managements of the Companies are responsible for practicing all acts required to consummate the Stock Merger.
9.6. Kroton will analyze the possibility of migrating the American Depositary Receipts (ADRs) issued by Anhanguera to the Level 1 ADRs issued by Kroton, provided this does not incur any additional costs or obligations for Kroton.
9.7. The events described in this Material Fact notice, as well as other matters submitted to the shareholders of the companies involved in the Shareholders' Meetings considering and voting on the
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Merger Agreement are reciprocally dependent legal transactions, with the assumption that one transaction will not produce effect if the other transactions do not also produce effect.
10. Availability of documents.
10.1. The Merger Agreement, the audited Financial Statements of Anhanguera, the Valuation Report and the other documents referred to in Article 3 of CVM Instruction 319/99 are available at the registered offices of each of the Companies, on the Investor Relations website of Anhanguera ( www.anhanguera.com/ir ), on the Investor Relations website of Kroton ( www.kroton.com/ir) and on
the websites of the CVM ( www.cvm.gov.br) and of the BM&FBOVESPA (www.bm&fbovespa.com.br).
June 6, 2014
Investor Relations Officer
Anhanguera Educacional Participações S.A.
Investor Relations Officer
Kroton Educacional S.A.
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