GP INVESTMENTS, LTD.
MATERIAL FACT
GP INVESTMENTS, LTD., a company headquartered at 129, Front Street, Penthouse, Hamilton HM
12, Bermuda (“Company” or “GP”), whose Class A Shares are traded in form of Brazilian Depositary
Receipts (BDRs) on the stock exchange managed by BM&FBOVESPA S.A. - Bolsa de Valores,
Mercadorias e Futuros, pursuant to Rule No. 358/02 of Brazilian Securities and Exchange Commission
(Comissão de Valores Mobiliários), hereby informs that:
Magnesita Refratários S.A. (“Magnesita”), a portfolio company of investment funds managed by
GP or its affiliates, has announced a transaction to combine its operation with RHI AG (“RHI”),
creating a leading company in refractory solutions (“RHI Magnesita”) (“Transaction”), through
the execution of an Agreement for the Sale and Purchase of Shares in the Magnesita.
RHI Magnesita shares will be listed in the Premium segment of the Official List on the Main Market of
the London Stock Exchange.
GP (through its affiliates and/or managed investment funds) will become a significant shareholder of
RHI Magnesita, which will be governed by a one-tier board structure with GP (and/or its affiliates)
being represented on its board of directors.
The implied value for the entire share capital of Magnesita will be € 451 million, 45% above
Magnesita’s market capitalization as of October 04, 2016.
This Transaction valuation represents a potential significant upside to GP when compared to
Magnesita’s fair value within the latest publicly available data as of June, 2016. However, the actual
impact of the Transaction on GP’s Net Asset Value (NAV) will depend on the evolution of Magnesita’s
market price until the completion of the Transaction.
The completion of the Transaction is subject to the satisfaction of certain conditions, including the
approval by RHI’s Supervisory Board and competent antitrust authorities.
Please see Magnesita’s Material Fact attached hereto (Schedule I) which describes and provides details
about the Transaction.
The Company will keep the market and its shareholders informed about any updates regarding the
matters hereof.
October 05, 2016.
Alvaro Lopes da Silva Neto
Chief Financial and Investor Relations Officer
Schedule I
MAGNESITA REFRATÁRIOS S.A.
Publicly Held Company
CNPJ (Corporate Taxpayer Registration) Nr. 08.684.547/0001-65
NIRE (Commercial Registry Number) 31.300.026.485
MATERIAL FACT
Magnesita Refratários S.A. (“Company” or “Magnesita”), pursuant to the terms of Law No. 6.404/76
and Rule No. 358/02 of Comissão de Valores Mobiliários (“CVM”), hereby informs its shareholders
and the market in general of the following:
1.
On the present date, the Company was informed by Alumina Holdings, LLC (a controlling
entity of the following investment funds managed by GP Investments, Ltd. or its affiliates (“GP”): GP
Capital Partners III, L.P. and GP Capital Partners IV, L.P., among other co-investment funds)
(“Alumina”), Rearden L. Holdings 3 S.À R.L. (“Rearden”) and RHI AG (“RHI”) that Alumina and
Rhône Capital (“Rhône”, and together with Alumina, “Magnesita’s Controlling Shareholders”) and RHI
have reached an agreement to combine the operations of RHI and the Company to create a leading
company in refractory solutions. Accordingly, the Management Board of RHI has agreed to sign an
Agreement for the Sale and Purchase of Shares in the Company (“SPA”) with Magnesita’s Controlling
Shareholders regarding the acquisition of a controlling stake of at least 46%, but no more than 50% plus
one share, of the entire share capital in the Company, pending RHI’s Supervisory Board approval (the
“Transaction”). The purchase price for the 46% stake will be paid in cash amounting to € 118 million
and 4.6 million new shares to be issued by a new RHI entity, to be named RHI Magnesita, established in
the Netherlands and listed in London (“RHI Magnesita”). Based on RHI’s six month volume-weighted
average price (VWAP) of € 19.52, the implied value of the 46% stake amounts to € 208 million.
Following completion of the Transaction, RHI Magnesita or one of its affiliates will launch a mandatory
tender offer for the remaining shares in Company.
2.
Magnesita’s Controlling Shareholders and RHI have also informed the Company of the
following:
(a)
Overview
As a result of the Transaction, GP (and/or its affiliates) will become a relevant shareholder of
RHI Magnesita. In terms of corporate governance, RHI Magnesita will have a one-tier board
structure with GP (and/or its affiliates) represented on the board of directors. All RHI Magnesita
shares issued as a result of the Transaction and subsequent mandatory tender offer will be
subject to a minimum 12-month lock-up period.
The completion of the Transaction is amongst others subject to (i) approvals by the relevant
competition authorities, (ii) the migration of RHI to the Netherlands, (iii) the listing of RHI
Magnesita shares in the premium segment of the Official List on the Main Market of the
London Stock Exchange; and (iv) RHI’s Supervisory Board having approved the Transaction
and RHI’s shareholders not having exceeded statutory withdrawal rights in an amount of more
than € 70 million in connection with organizational changes preceding RHI’s migration from
Austria. The migration and the preceding organizational changes in Austria require qualified
approval by RHI’s shareholders. If the Transaction is terminated for reasons not under the
control of Magnesita’s Controlling Shareholders, an aggregate break fee of up to €20 million is
payable by RHI to Magnesita’s Controlling Shareholders.
The migration of RHI to the Netherlands and the subsequent listing of RHI Magnesita’s shares
in the London Stock Exchange have the objective of reinforcing and underlining the truly
international scope of the combined operations, enhancing the capital markets presence and
maximizing the value potential for RHI Magnesita’s shareholders. The migration of RHI will be
effected by RHI Magnesita becoming the ultimate holding company of RHI Group and the
shareholders of RHI will cease to hold shares in RHI and instead hold RHI Magnesita shares.
Following registration of the corporate restructurings, RHI’s shares will cease to be listed on the
Vienna Stock Exchange. The place of effective management of RHI Magnesita will be Austria.
(b)
Financial Terms of the Transaction
Based on RHI’s 6-month VWAP of € 19.52, the implied value for the entire share capital of the
Company will be € 451 million, 45% above the Company’s market capitalization as of October
4, 2016. The Transaction will be financed by additional debt and the issuance of 4.6 million
RHI Magnesita shares to Magnesita’s Controlling Shareholders.
(c)
Public Tender Offer
Following Completion, pursuant to Law No. 6.404/76, the regulations of the CVM and to the
Listing Rules of the Novo Mercado Segment of the Brazilian Stock Exchange
(BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros), RHI Magnesita or one of
its affiliates will launch a mandatory tender offer to acquire the remaining shares issued by the
Company (“OPA”), in consideration for which the Company’s shareholders will receive cash
and newly issued shares of RHI Magnesita. As part of the OPA, a maximum number of 5.4
million new RHI Magnesita shares will be issued to shareholders of the Company who tender
their shares in the Offer, resulting in an aggregate number of no more than 10.0 million newly
issued shares of RHI Magnesita being issued to finance the acquisition.
The OPA will be directed at all the shareholders of the Company on the same terms and
conditions, including consideration per share, form of payment (i.e. RHI Magnesita shares and
cash) and a 12-month lock-up period, as those offered to Magnesita’s Controlling Shareholders
under the Transaction. In accordance with art. 29, § 8º of Rule CVM No. 361, RHI Magnesita or
one of its affiliates will also make an alternative offer, whereby each OPA offeree will be able
to choose, at its sole discretion, to receive this consideration in cash only, instead of cash and
RHI Magnesita shares (“Cash-only OPA”). Shareholders who choose to tender their shares in
the Cash-only OPA will receive € 8.19 for each Magnesita share, subject to adjustments
provided in the SPA.
If some or all of the Company’s remaining shareholders elect not to receive shares in the OPA,
Magnesita’s Controlling Shareholders have committed to purchase at least an additional 1.9
million and at most 3.4 million of the remaining new RHI Magnesita shares, thereby increasing
their total number of RHI Magnesita shares to a maximum of 8.0 million. Any RHI Magnesita
shares that are not taken up by Magnesita’s shareholders in the OPA, including by the
Magnesita’s Controlling Shareholders, may be either placed in the market or with institutional
investors.
RHI Magnesita or one of its affiliates may, at its sole discretion, decide to combine the OPA
with a delisting offer of the Company and/or a voluntary offer to exit the Company from the
Novo Mercado Segment of the Brazilian Stock Exchange, pursuant to §4º, of article 4º, of Law
no. 6.404/76, to Rule CVM No. 361 and to the Listing Rules of Novo Mercado.
(d)
About RHI and other relevant information
RHI is a globally operating supplier of high-grade refractory products, systems and services,
which are indispensable for industrial high-temperature processes exceeding 1,200 °C. With
approximately 7,900 employees, over 30 production facilities and more than 70 sales offices,
RHI serves more than 10,000 customers in the steel, cement, nonferrous metals, glass, energy
and chemical industries in nearly all countries around the world. RHI produces more than 1.5
million tons of refractory products p.a. and supplies customized product and system solutions.
RHI’s shares are listed on the Vienna Stock Exchange under the symbol RHI, with RHI being a
member of the ATX index.
On this date, RHI issued a press release containing the information below in relation to the
combined operations of RHI and Magnesita, which are subject to the assumptions and
limitations described in RHI’s press release. Note that, in line with previous practice the
Company and Magnesita’s Controlling Shareholders do not give financial guidance. The press
release provides RHI’s mid-term financial guidance and synergy estimates for RHI Magnesita:

The Transaction will increase RHI’s current financial leverage, measured as net debt to
EBITDA, to 4.0 times at closing of the Transaction, assuming an acquisition of the
Company’s entire share capital1. RHI expects, however, that leverage will decline to
below 2.0 times by 2020 as a result of the strong cash generation profile of the newly
combined operations. Magnesita will continue to finance itself on a standalone basis
without credit support from RHI Group. Before or at completion, Magnesita is expected
to adopt RHI's accounting practices, which, according to RHI, could lead to significant,
substantially non-cash adjustments in Magnesita's equity book value;

RHI expects minimum net run-rate synergies at EBIT level of approximately € 36
million by 2020. However, RHI is optimistic that as a result of the Offer, RHI
Magnesita’s stake in Magnesita will significantly exceed 46%. In this case, RHI expects
substantially higher synergies of approximately € 72 million, especially in the areas of
enhanced production efficiency and cost benefits in research and development,
marketing and administrative functions. In addition, capital expenditure synergies are
expected to amount to between € 2 million and to € 7 million annually, while aggregate
working capital savings of € 40 million are expected in the coming years. Cash
integration costs are expected by RHI to be of the magnitude of € 50 million to € 90
million, while non-cash integration costs, effectively write-offs, should vary between €
20 million and € 35 million, depending on the amount of Magnesita shares acquired
pursuant to the Transaction and subsequent to the Offer. Both cash and non-cash
integration costs will mainly crystallize in 2017 and 2018;

RHI’s mid-term financial targets will surpass RHI’s current targets. RHI expects RHI
Magnesita to generate fully consolidated revenues of € 2.6 billion to € 2.8 billion
(previously € 2.0 billion to € 2.2 billion) with an operating EBIT margin of more than
12% (previously more than 10%) by 2020. RHI projects a cumulative operating cash
flow of approximately € 1.1 billion for the period from 2017 to 2020 for the combined
business, assuming an acquisition of Magnesita’s entire share capital. RHI expects that
RHI Magnesita will pay stable dividends in 2017 and 2018, in line with RHI’s previous
years’ payment levels. In the mid-to long-term, however, RHI Magnesita aims to
increase its dividend payments, as a result of stronger cash flow generation resulting
from synergies, organic growth and de-leveraging of the company’s capital structure.
3.
In view of the Transaction, a meeting of the Company’s Board of Directors will be convened in
due course to reevaluate the continuation of the corporate reorganization of Magnesita Group disclosed
to the market on December 22, 2015.
4.
The Transaction is expected to complete in 2017. Until then, the two companies will remain
completely separate and independent. Therefore, customer, suppliers, employees and other stakeholders
should expect no change in management teams, commercial relationships, supply chains and product
offerings, during this period.
5.
The Company will keep its shareholders and the market in general informed regarding the next
events of the Transaction.
São Paulo, October 5, 2016.
Eduardo Gotilla
Financial and Investors’ Relations Officer
Magnesita Refratários S.A.
1
Assuming that 10 million RHI Magnesita shares will be issued.