Shiloh Industries, Inc. to Proceed with Sale to Grouper Holdings, LLC, a Subsidiary of MiddleGround Capital
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VALLEY CITY, Ohio--(BUSINESS WIRE)--Shiloh Industries, Inc. (OTCMKTS: SHLOQ) (the "Company" or "Shiloh"), an environmentally focused global supplier of lightweighting, noise and vibration solutions, has completed the marketing process approved by the U.S. Bankruptcy Court for the District of Delaware (the "Court") and is moving forward under the previously announced asset purchase agreement with Grouper Holdings, LLC, a subsidiary of MiddleGround Capital LLC ("MiddleGround"). MiddleGround is expected to acquire substantially all of the Company's assets, including the equity interests of certain of the Company's direct and indirect subsidiaries.

"We believe this outcome is in the best interests of Shiloh and our stakeholders, and we look forward to building on our unique strengths as part of MiddleGround," said Cloyd J. Abruzzo, interim chief executive officer of Shiloh. "MiddleGround has expressed a strong interest in supporting Shiloh from the outset of our restructuring process and has a successful track record investing in companies that supply the automotive industry. We are confident that they will be a strong partner as we enter this new chapter for our company. Importantly, we expect the transaction to be completed quickly and the transition to be seamless for our customers, partners and dedicated employees."

John Stewart, Partner at MiddleGround commented, "We look forward to working with Shiloh's employees and management team to continue providing customers with highly competitive lightweighting products and technologies. We believe that MiddleGround's experience and knowledge of the industry will enhance Shiloh's portfolio of differentiated product solutions and accelerate its growth within the automotive sector."

On August 30, 2020, MiddleGround was named the "stalking horse bidder" in a court-supervised auction and sale process. Pursuant to the bid procedures approved by the Court, qualified bidders were required to submit competing bids before 4:00 p.m. Eastern Time on Monday, October 26, 2020. While Shiloh received other bids, none were higher or better than MiddleGround's stalking horse bid. Accordingly, a hearing to seek required Court approval for the MiddleGround transaction is scheduled for November 10, 2020. The transaction is also subject to certain other closing conditions. Shiloh anticipates the closing of the sale will occur no later than December 15, 2020.

Additional information is available on Shiloh's restructuring website at www.shilohrestructuring.com, or by calling Shiloh's Restructuring Hotline at (877) 462-4380 (toll-free in the U.S. and Canada) or (347) 817-4091 (for calls originating outside the U.S. and Canada). Court documents and additional information about the court-supervised process are available on a separate website administered by Shiloh's claims agent, Prime Clerk, at https://cases.primeclerk.com/shiloh.

Jones Day is serving as legal counsel to Shiloh, Houlihan Lokey Capital Inc. is serving as financial advisor, and Ernst & Young LLP is serving as restructuring advisor. Baker McKenzie LLP is serving as legal counsel to MiddleGround.

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About Shiloh Industries, Inc.

Shiloh Industries, Inc. (OTCMKTS: SHLOQ) is a global innovative solutions provider focusing on lightweighting technologies that provide environmental and safety benefits to the mobility market. Shiloh designs and manufactures products within body structure, chassis and propulsion systems. Shiloh's multicomponent, multi-material solutions are comprised of a variety of alloys in aluminum, magnesium and steel grades, along with its proprietary line of noise and vibration reducing ShilohCore® acoustic laminate products. The strategic BlankLight®, CastLight® and StampLight® brands combine to maximize lightweighting solutions without compromising safety or performance. Shiloh has approximately 3,450 dedicated employees with operations, sales and technical centers throughout Asia, Europe and North America.

About MiddleGround Capital

MiddleGround Capital is a private equity firm that makes control equity investments in lower middle market North American companies in the B2B industrial and specialty distribution sectors. MiddleGround works with its portfolio companies to create value through a hands-on operational approach and partners with its management teams to support long-term growth strategies. MiddleGround is currently investing out of its first fund and headquartered in Lexington, KY with a second office in New York City. For further information, please visit: www.middlegroundcapital.com.

Forward-Looking Statements

All statements contained in this press release that are not historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The forward-looking statements are made on the basis of management's assumptions and expectations. As a result, there can be no guarantee or assurance that these assumptions and expectations will in fact occur. The forward-looking statements are subject to risks and uncertainties that may cause actual results to materially differ from those contained in the statements due to a variety of factors, including (1) the duration and severity of the COVID-19 pandemic, any preventive or protective actions taken by governmental authorities, the effectiveness of actions taken globally to contain or mitigate its effects, and any unfavorable effects of the COVID-19 pandemic on either the Company's manufacturing operations, or those of its customer's or suppliers; (2) reduction in demand for the Company's solutions, including any reduction in demand as a result of a COVID-19 triggered economic recession, including any determination that the value of its assets is impaired or that it does not have the ability to continue as a going concern; (3) the Company's ability to accomplish its strategic objectives; (4) the Company's ability to obtain future sales; (5) changes in worldwide economic and political conditions, including adverse effects from terrorism or related hostilities; (6) costs related to legal and administrative matters; (7) the Company's ability to realize cost savings expected to offset price concessions; (8) the Company's ability to successfully integrate acquired businesses, including businesses located outside of the United States; (9) risks associated with doing business internationally, including economic, political and social instability, foreign currency exposure and the lack of acceptance of the Company's products; (10) inefficiencies related to production and product launches that are greater than anticipated; (11) changes in technology and technological risks; (12) work stoppages and strikes at the Company's facilities and that of its customers or suppliers; (13) the Company's dependence on the automotive and heavy truck industries, which are highly cyclical; (14) the dependence of the automotive industry on consumer spending, which is subject to the impact of domestic and international economic conditions affecting car and light truck production; (15) regulations and policies regarding international trade; (16) financial and business downturns of the Company's customers or vendors, including any production cutbacks or bankruptcies; (17) increases in the price of, or limitations on the availability of aluminum, magnesium or steel, the Company's primary raw materials, or decreases in the price of scrap steel; (18) the successful launch and consumer acceptance of new vehicles for which the Company supplies parts; (19) the impact on financial statements of any known or unknown accounting errors or irregularities, and the magnitude of any adjustments in restated financial statements of the Company's operating results; (20) the Company's ability to obtain Bankruptcy Court approval with respect to motions in the Chapter 11 Cases; (21) the effects of the Chapter 11 Cases on the Company and on the interests of various constituents; (22) potential delays in the Chapter 11 process due to the effects of the COVID-19 pandemic; (23) objections to the Stock and Asset Purchase Agreement, DIP Credit Agreement or other pleadings filed that could protract the Chapter 11 Cases; (24) the Bankruptcy Court's rulings in the Chapter 11 Cases, including the approvals of the terms and conditions of, and the transactions contemplated by, the Stock and Asset Purchase Agreement and the DIP Credit Agreement (25); the outcome of the Chapter 11 Cases in general; (26) the length of time the Company will operate under the Chapter 11 Cases; (27) risks associated with third-party motions in the Chapter 11 Cases; (28) the potential adverse effects of the Chapter 11 Cases on the Company's liquidity or results of operations and increased legal and other professional costs related to the Chapter 11 Case; (29) the ability of the Company to meet the closing conditions and successfully consummate the Stock and Asset Purchase Agreement; (30) employee attrition and the Company's ability to retain senior management and other key personnel due to the distractions and uncertainties; (31) the trading price and volatility of the Company's common stock; (32) increases in pension plan funding requirements; (33) the Company's ability to derive a substantial portion of its sales from large customers; (34) a successful transition of the CEO position and the Company's ability to successfully identify a qualified and effective full-time CEO; and (35) other factors besides those listed here could also materially affect the Company's business. See (a) "Part I, Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2019 and (b) Part II, Item 1A. Risk Factors" in the Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended January 31, 2020, April 30, 2020 and July 31, 2020 for a more complete discussion of these risks and uncertainties. Any or all of these risks and uncertainties could cause actual results to differ materially from those reflected in the forward-looking statements. These forward-looking statements reflect management's analysis only as of the date of this press release. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date of this press release. In addition to the disclosures contained herein, readers should carefully review risks and uncertainties contained in other documents the Company files from time to time with the Securities and Exchange Commission.stats

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