M. DIAS BRANCO S.A. (“M. DIAS” or “Company”), pursuant to paragraph 4, Article 157 of Law 6404 of December 15, 1976 (and subsequent amendments) and the Brazilian Securities and Exchange Commission (“CVM”) Rule 358 of January 3, 2002 (and subsequent amendments), hereby informs its shareholders and the market that:
M. DIAS entered into, on this date, Agreements for Share Purchase and Other Covenants to acquire all shares of the capital stock of i) PELÁGIO PARTICIPAÇÕES S.A., inscribed in the roll of corporate taxpayers (CNPJ) under no. 11.788.655/0001-92, a commercial company headquartered in and under the jurisdiction of the city of Fortaleza, state of Ceará, at Rua Rufino de Alencar, 121, Sala 2, Centro, which holds the entire capital stock of PELÁGIO OLIVEIRA S.A., inscribed in the roll of corporate taxpayers (CNPJ) under no. 07.224.090/0001-43, headquartered in and under the jurisdiction of the municipality of Maracanaú, state of Ceará, at Av. Parque Oeste, nº 2101, Distrito Industrial, and ii) J. BRANDÃO COMÉRCIO E INDÚSTRIA LTDA., inscribed in the roll of corporate taxpayers (CNPJ) under no. 06.822.340/0001-84, headquartered in and under the jurisdiction of the municipality of Maracanaú, state of Ceará, at Av. Parque Oeste, nº 2113, Distrito Industrial.
Said companies operate under the assumed name “ESTRELA” and sell cookies, crackers, pasta and snacks in the country’s North and Northeast regions under the brands “ESTRELA”, “PELÁGGIO” and “SALSITO”. ESTRELA began its activities in 1946 in Fortaleza-CE and in 2010 recorded net revenue of R$190.6 million. As a result of this acquisition, M.DIAS’ leading market share in Brazil will grow from 24.1% to 25.3% in the cookies and crackers segment and from 24.5% to 25.2% in the pasta segment according to AC Nielsen data for September and October 2011.
The acquisition was made for the maximum amount of two hundred and forty million reais (R$240,000,000.00), of which (i) one hundred million reais (R$100,000,000.00) was paid cash on this date, (ii) one hundred million reais (R$100,000,000.00) in four (4) installments of twenty-five million reais (R$25,000,000.00) is payable on March 30, 2012, June 29, 2012, September 28, 2012 and December 28, 2012, which shall be paid plus the amount equivalent to the application of the CDI rate on the installment from the Execution Date until the actual payment date, (iii) the remaining amount of up to forty million reais (R$40,000,000.00) is payable in six (6) years less the amount of contingencies arising from acts or facts occurred until the execution of the Agreement and which may be payable by the acquired company. The acquisition will be submitted for approval by an Extraordinary Shareholders’ Meeting, called for this express purpose, in accordance with the first paragraph of article 256 of Law 6,404/76, in addition to being submitted for approval by the Brazilian Anti-Trust Authority (CADE).
This transaction is in line with the Company’s strategy of actively participating in the consolidation of the sector, expanding its national leadership in the cookies, crackers and pasta segments, in addition to adding value due to efficiency gains in the Company’s crushing units and vegetable shortening plant, strengthening its operations in the North and Northeast regions of Brazil.
Further details on this transaction will be provided at a conference call to be held on December 28, 2011, at 11:00 a.m. (Brasília time), with simultaneous translation, and in a press release available on the websites of the Company and the CVM.
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