Acquisition of PYPSA - Mexican Engineering Company

Date: JUL 30, 2014

Airtificial signs an agreement with the mexican company MISAPRE member of the BBVA group for the acquisition of the mexican engineering company PYPSA, which has a staff of 160 engineers and works in the development and management of industrial and civil projects for diverse sectors as the industrial, touristic, maritime, oil, infrastructure, pharmaceutical, construction, and agricultural. This acquisition is subject to obtain all the governmental, corporate, and third-party approvals

The acquisition of PYPSA, a local engineering leader, allows Airtificial to consolidate its position in the engineering Mexican market, being Mexico the second largest economy in Latin America, with a stable risk/country profile and good macroeconomic prospects.

Mexico stands out as the fifth largest world producer of vehicles and is the current destination of the large world manufacturers due to its potential growth and export volume to the United States and Canada (its partners in the North American Free Trade Agreement NAFTA or TLCAN in its acronym in Spanish); as well to the south, throughout Latin America.

The growth of the Mexican market has been consolidated in the last four years with the announcement of the opening of six new vehicle assembly plants for brands such as Audi, Mazda, Honda, Mercedes Benz, and Nissan-Renault. BMW was the last major manufacturer to announce an investment for the construction of an automobile assembly plant in the State of San Luis Potosi (in the north of the country), which will begin operating in 2019 with a production capacity of 150,000 units and will create 1,500 direct jobs.

Airtificial already works with BMW, as well as with other major brands such as Jaguar, Land Rover or Pininfarina, through one of its automotive subsidiaries, the German engineering company aXcep GMBH, specialized in the development of official state cars and safety vehicles for high range car manufacturers, whose acquisition was signed in April, 2014. In addition, Airtificial already has its own presence in the Mexican automotive market, through its Spanish subsidiary Mapro (acquired in February, 2014). Mapro manufactures production lines of long series of car parts and technology to which Airtificial transfers and applies its RMCP (Rapid Multi-injection Compress Proccess), a multi-injection press that allows the manufacture of long series of car parts in competitive times with traditional metal manufacturing processes. The trend in the industry is to build more efficient cars by reducing the weight of the vehicle so carbon fiber is 4.5 lighter, three times stronger, more flexible than steel, and rustproof.

Five of twelve 12 plants that Airtificial has in four continents are dedicated to the automotive sector: Spain (Burgo de Osma and Manresa), Germany (Munich), Mexico, and Poland. Airtificial also has a commercial technical office in Detroit, United States, for the commercialization of its production lines.

PYPSA's purchase complements the agreement to acquire the Australian civil engineering work Capital House Australasia (CHA). The group expects an increase in its capacity in this sector, since the companies to be acquired have an extensive experience in the creation and management of civil work projects in sectors such as infrastructure, industrial, tourism, maritime, pharmaceutical, oil, agriculture, and construction. Therefore, with PYPSA's acquisition Airtificial will have the required engineering to access to high value technological programs.