Material Fact – Option to Purchase Borgato

JSL S.A. (“JSL” or “Company”) (B3:JSLG3), a publicly-held company, hereby announces to its shareholders and the market in general that it was signed, on this date, a Private Agreement of Option to Purchase Equity Interest (“Agreement”), by the Company and the wholly owner of the share capital of Borgato Maquinas S.A., Borgato Serviços Agrícolas S.A. and Borgato Caminhões S.A. (“Borgato Companies”).

Pursuant to the Agreement, the shareholders of the Borgato Companies granted to the Company an option to purchase 100% of Borgato‘s share capital. After this option is exercised, the purchase price of the Borgato Companies will be paid upon the transfer of a 9% equity interest in JSL Locação de Máquinas e Veículos Pesados Ltda. (“JSL Pesados”) and upon the payment of R$100 million, in installments. The purchase price will be subject to the regular adjustments in this type of transaction.

The Borgato Group was founded in 1987, is headquartered in Ribeirão Preto/SP, and works in the segment of rental and commercialization of trucks, and heavy machinery and equipment for the agricultural industry. The Borgato Companies also have 18 stores (truck and machinery dealerships) located in the states of São Paulo, Goiás, Mato Grosso and Minas Gerais. In 2016, the Borgato Companies had a combined net revenue of R$186 million and an EBITDA of R$96 million.

The purchase of the Borgato Companies is in line with JSL‘s growth strategy in the segment of rental and commercialization of heavy vehicles and machinery, complementing its current portfolio and contributing with the deleveraging of JSL.

As disclosed in a material fact of September 21, 2017, JSL has been evaluating the possibility of carrying out an IPO of its business of rental and commercialization of heavy assets (trucks and machinery), operated by JSL Pesados. The exercise of the purchase option under the Agreement may take place within this IPO.

JSL will keep the market up to date on the transactions provided for in the Agreement, including, if it resolves to exercise the option under the Agreement, the applicability or not of the provisions of Article 256 of Law 6.404/76 and if the Company’s shareholders will be entitled to withdrawal rights.

To access the full document, click here.