Material Fact – Acquisition of Rodoviário Schio Ltda.

JSL S.A. (“Company” or “JSL”), a publicly-held company with the broadest portfolio of logistics services in Brazil and the leader in its segment in terms of net revenue , in accordance with Instruction 358/2002 issued by the Brazilian Securities and Exchange Commission (“CVM”) and Article 157, paragraph 4, of Law 6404/1976, hereby informs its shareholders and the market in general that on this date it entered into a Private Instrument of Purchase of Equity Interest and Other Covenants (“Agreement”) with the holders of 100% of the capital stock of Rodoviário Schio Ltda. (“Schio”).

About Schio

Founded in 1969 in the town of Vacaria, Rio Grande do Sul state, and operating in the road transportation, warehousing and road distribution segments, Schio is one of the leading temperature-controlled logistics companies in the Mercosur, with operations in Brazil, Argentina, Uruguay and Venezuela, in addition to a presence in Chile.

The company operates in the food and beverage, hygiene and cleaning segments, among others, with a fleet of more than 1,400 own operational assets (including trucks, truck tractors and trailers) and over 2,300 third-party vehicles, in addition to operations in 10 distribution centers.

The Company expects the acquisition of Schio to bring important benefits to JSL, including:

i. Expansion of its logistics services platform, marking the Company’s entry into the food and temperature-controlled market in a leadership position;

ii. Even greater consolidation of a single logistics service platform in Brazil, expanding JSL’s leadership in the domestic market and its entry into other South American countries;

iii. Enhancement of competitive advantages, such as even greater scale gains in the purchase and resale of assets and the acquisition of the main inputs, added to the absorption of expertise and a specialized workforce; and

iv. Strengthening of the relationship with Schio’s current clients, with opportunities of adding new contracts (cross-selling), offering JSL’s services to the additional client base.

In 2010, Schio posted net revenue of R$ 327.4 million and EBITDA of R$ 68.5 million .

About the Transaction

Pursuant to the Agreement, Schio will become a publicly-held company and the Company will directly acquire 100% of its shares (“Transaction”), .

The price of the Transaction will be R$ 250.3 million (“Transaction Value”), corresponsding to the value attributed to Schio of R$ 405 million, less net debt and other adjustments totaling R$ 154.7 million, as agreed between the parties. The Transaction Value will be subject to the retention, until January 2, 2017, of R$ 65.0 million, duly restated by 100% of the CDI interbank rate, to guarantee the payment of any eventual liabilities and contingencies generated by Schio prior to the execution date (“Retention”).

The Transaction Value, net of Retention (“Net Transaction Value”), will be paid to Schio’s current shareholders (“Sellers”) in two installments, as follows:

  • “Share Purchase” – cash payment of R$ 162.1 million for the acquisition of 87.5% of Schio’s capital stock to the Sellers in up to two business days after the approval of the Transaction by the Company’s Extraordinary Shareholders’ Meeting; and
  • “Merger” – Merger of Schio into the Company. As a result of the merger, the Company will hold 100% of Schio’s capital stock. Schio’s shares will be replaced by new shares to be issued by the Company. Pursuant to the Agreement, the share swap ratio will be calculated by dividing (a) the portion equivalent to 12.5% of the Net Transaction Value by (b) R$ 9.50, the Company’s share price agreed upon for the purposes of the exchange ratio. The Company also undertook to pay the seller who will receive these shares the difference, if any, between 100% of the variation in the CDI interbank rate and the appreciation of the Company’s shares during a period of 5 years as of the Merger date, pursuant to the terms of the Agreement.

To finance this operation, the Company contracted a bank loan in the amount of R$ 300 million, with a maturity period of 8 years, with a five-year grace period.

The implementation of the Transaction is contingent on compliance with the usual obligations and conditions precedent for this type of transaction, including, without limitation, the approval by the Extraordinary Shareholders’ Meeting.

As soon as the documents required by the prevailing legislation are finalized, the Company will call an Extraordinary Shareholders’ Meeting to approve the Share Purchase, pursuant to Article 256, paragraph 1, of Law 6404/76 and in accordance with the Agreement. The Agreement and the other documents related to the Transaction will be available to Company shareholders as of the date of publication of the call notice for the Extraordinary Shareholders‘ Meeting which will approve the Share Purchase.

Pursuant to Article 256, paragraph 2, of Law 6404/76, Company shareholders who dissent from the resolution on the approval of the Transaction, who abstain from voting in said Extraordinary Shareholders’ Meeting or who do not attend said meeting are entitled to the withdrawal rights guaranteed by legislation, with reimbursement for their shares calculated based on the book value of said shares, equivalent to R$ 4.088428 per share in accordance with the balance sheet of December 31, 2010. Pursuant to Article 45 of Law 6404/76, the shareholders’ right to request the preparation of a special balance sheet will be observed.

The payment of said reimbursement will only be guaranteed to those Company shares to which the shareholder has proof of ownership on November 22th, 2011, computed the operations performed on that date inclusive.

The Agreement will be submitted to the Brazilian antitrust authorities (Administrative Council for Economic Defense – CADE, Economic Law Department – SDE and Secretariat for Economic Monitoring – SEAE) within the deadline established by law.

A Company’s Extraordinary Shareholders’ Meeting will be opportunely called to approve the Share Merger, when the Company will also publish a Notice to Shareholders with all the information required by legislation and CVM Instruction 319/99.

The Company’s controlling shareholder will take all the necessary measures to execute the Transaction, including voting in favor of the approval of the Transaction and the Share Merger at the Company’s Extraordinary Shareholders’ Meetings to be opportunely called to address the matter.

For this Transaction, the Company hired the exclusive financial advisory services of Banco Bradesco BBI S.A, while the Sellers hired the exclusive financial advisory services of Banco BTG Pactual S.A.

In order to clarify any eventual doubts on the part of investors in regard to this Material Fact, the Company will hold a conference call and webcast on November 22, at 3:00 p.m., which can be accessed via

São Paulo, November 21, 2011

Denys Marc Ferrez
Chief Financial, Administrative and Investor Relations Officer

To access the Material Fact, click here.

The company will host a Conference Call to discuss the Material Fact:

Conference Call and Webcast (with Simultaneous Translation into English)
Tuesday, November 22, 2011
12:00 p.m. (NY Time)
03:00 p.m. (Brasília Time)

Dial-in Phone Numbers
Parties in Brazil: +55 (11) 3127-4971
Parties in other countries: +1 (516) 300-1066
Access Code: JSL

Webcast Access
The webcast access links will be found at the Company‘s IR website

The presentation will be available 10 minutes before the event.

To access the invitation, click here.