Labs D Or Acquisition

Labs D’Or Acquisition

FLRY3

IBGC – 2010

Corporate Governance Award Listed Companies

IBGC - Brazilian Institute of Corporate Governance

Disclaimer

This document contains forward-looking statements. Such statements reflect Company s management vision and expectations. As such, words as “anticipates”, “believes”, “estimates”, “expects”, “forecasts”, “plans”, “predicts”, “project”, “targets” (and similar) are intended to identify statements which, necessarily, include known and unknown risks and uncertainties. Known risks and uncertainties include (but are not limited to) the impact of competitors movements regarding service levels and pricing, recognition of the services by the consumer market, regulatory approval, exchange rate fluctuations, changes on the services portfolio and other risks which are described in the Company s reports.

Forward-looking statements represent the best information available in the date when they are prepared and Fleury Group does not undertake any obligation to update them when new information becomes available or future events happen.

26 acquisitions since 2002

Timeline of Acquisitions – Fleury Group

2002 2004 2005 2007 2008

Paraná

Rio de Janeiro

São Paulo Bahia

São Paulo Paraná Pernambuco Bahia Rio de Janeiro São Paulo 2009 Rio de Janeiro Rio Grande do Sul 2010 São Paulo 2011 Bahia Rio de Janeiro

National Presence

4 4

Strong brand portfolio

Fleury – Best and most trusted brand in Brazilian Market; leader in A/B plans

“a+” – National brand, great potential for capturing B/C plans.

Weinmann – Leader in Rio Grande do Sul for A/B plans

Campana – Competitive offer for basic plans in São Paulo

Diagnoson – New acquisition, adding Imaging services in Bahia

Labs

D’Or + Felippe Mattoso

+ Menezes da Costa

Pernambuco

Rio Grande do Sul Paraná

São Paulo

Rio de Janeiro DF

In the MoU announced on Dec 15th_{, 2010, Fleury Group communicated the intention to} acquire several diagnostic medicine assets from “Rede D’Or” (Labs D’Or).

Over the past 6 months Financial, Legal and Operational Due Diligences were performed and transaction documents were negotiated (Investment Agreement, Shareholders’ Agreement and Operational Contracts).

We can now announce that the deal has been signed by all parts involved.

As a result, subject to its shareholders approval, Fleury Group has acquired 57 Patient Service Centers (concentrated in Rio de Janeiro state) and became responsible to provide Diagnostic Services in 21 hospitals.

Some relevant information about Labs D’Or:

Owns 35 MRIs, 17 CT scans and 1 PET-CT in RJ, being the state’s leader in Image Diagnostics.

Services more than 200 thousand patients per month (circa 500 thousand tests). In 3 out of the 21 hospitals (Hospitais “São Luiz” - São Paulo), besides Clinical Analysis, Fleury Group will be responsible for Image Services.

Fleury Group’s estimated annualized Net Revenue will soon exceed R$ 1.5 billion.

Number of PSCs in Rio de Janeiro state increases from 27 to 83; number of Hospitals where the Group operates increase from 9 to 30.

Fleury Group becomes leader in Image Diagnostics in Rio de Janeiro and Diagnostic Operations in Hospitals.

Positive outlook for growth and knowledge exchange, due to the strategic alliance established with “Rede D’Or”/ “São Luiz” Hospitals.

Companies aligned regarding the emphasis given to Operational Excellence, Relationship with Physicians networks, design of differentiated portfolios of Services and Brands and, most importantly, Customer Satisfaction.

Projected savings add up to R$ 20 millions per year

Materials and Outsourcing R$ 6.3 millions

Fixed Cost - Clinical Analysis R$ 9.1 millions Fixed Costs (PSCs and SG&A) R$ 4.7 millions

Potential for Goodwill amortization.

An unique Strategic Alliance between Leaders

Beyond Savings and Fiscal Benefits, Revenues Synergies Opportunity:

•

•

•

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Gross revenues breakdown by business line Gross revenues breakdown by type of Test

Fleury Group & Labs D’Or

Assets being acquired generate R$ 444MM of Annualized Net Revenue and an absolute EBITDA of R$ 111MM (25% Margin on Net Revenue).

Estimated Consideration is R$ 1,19 BN; Net Debt is R$ 23,5 million.

First Stage – July 31st - acquisition of 50% of Labs D’Or for R$ 620MM (i) R$ 434MM in Aug 1st

(ii) R$ 186MM to be paid in 6 months after the signing

Second Stage – After acquisition approval (Special Shareholders Meeting) 24.9 million FLRY3 common shares (to be issued) – 15,94% stake. Other Relevant Financial KPIs:

Working Capital: R$ 55MM

CapEx Investment (only Expansion) until Apr 30th: R$ 8MM Book Equity Value: R$ 248MM.

Valuation and Multiples – Expected Values

Annualized

10

R$ Million

Gross Revenus 1.085 460 1.545

Net Revenue (R$ million) 1.015 444 1.459

EBITDA (R$ million) 235 111 346

% Margem 23.2% 25.0% 23.7%

Patient Service Centers 137 57 194

Operations in Hospitals 9 21 30 Employees 4.950 3.000 7.950 Physicians 630 500 1.130

R$ MM

1.189

(24)

Equity Value

1.166

x EBITDA Labs (pre-sinergy)

10.7

Follow-up and Schedule

MoU ... Dec 15th₂₀₁₀ Due Diligence (Financial, Legal and Operational) ... 1Q11

Documents Definition – SPA, Shareholders Agreement ... 2Q11

Transaction Approval - Board of Directors ... July 13th ₂₀₁₁ Signing ... July 13th ₂₀₁₁ Reorganization / Consolidation ... End of July 2011 Direct acquisition of quotas – 50% of Labs D´Or ... July 31st₂₀₁₁ Financial Audit – Opening Balance Sheet ... September 2011 Transaction Approval - Shareholders Meeting ... October 2011 New FLRY3 Shares Issuance ... October 2011 Shares Incorporation ... October 2011 Transaction Approval – Administrative Council of Economic Defense - to be defined

Corporate Governance

Maintenance of the highest Corporate Governance standards.

Agreements with “Rede D’Or / São Luiz” Hospitals established at market conditions. Labs D’Or shareholders will receive common shares (to be issued), corresponding to a 15.94% stake.

The shares will be subject to lock-up restrictions.

After the Incorporation of Labs D’Or shares, their current owners will have the right to recommend 2 Board members (1 of them Independent ), who shall be approved by the Shareholders.

Number of Board seats will increase from 9 to 10.

Shareholder Structure

After Deal

62.7%

77.7%

131 million voting shares

22.3% 31.8% 5.4% Before Deal Integritas Bradseg and “Core” Partners Free Float Bradseg “Core” 52.8% 77.7%

156 million voting shares

22.3% 26.8% 4.5% Integritas Bradseg and “Core” Partners Free Float Bradseg “Core” D’Or Shareholders 15.9%

TODOS OS DIREITOS RESERVADOS – 2011

Labs D’Or Patient Service Centers

Rio de Janeiro

Hospitals

16 Copa D’Or (RJ) _{Quinta D’Or (RJ) Rios D’Or (RJ) Barra D’Or (RJ)}

Hospital Brasil (ABC Paulista)

Hospitals

Hospital São Luiz - Morumbi

(SP) Hospital São Luiz - Itaim (SP) Hospital São Luiz - AnáliaFranco(SP)

Hospitals

18 Badim & Israelita (2)

(RJ) São Marcos (PE) (2)