Shiloh Industries Inc., a global supplier of lightweighting, noise and vibration solutions, has entered into a stalking horse stock and asset purchase agreement with Grouper Holdings LLC, a subsidiary of MiddleGround Capital LLC, pursuant to which Grouper will acquire substantially all of the Shiloh’s assets, including the equity interests of certain of the company’s direct and indirect subsidiaries for an aggregate consideration of $218 million in cash, subject to working capital and net debt adjustments, and assumption of certain liabilities of the company.
To facilitate the transaction process, Shiloh and certain of its U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. MiddleGround, via Grouper, will serve as the “stalking horse bidder” in a court-supervised auction and sale process. Shiloh’s operating entities outside the U.S., while included in the agreement with MiddleGround, are not part of the court-supervised process, and its operations in Asia, Europe and Mexico are expected to continue as normal.
Shiloh’s operations will continue throughout the sale process and it will continue to meet customers’ needs. In conjunction with the proposed sale transaction, the company has received a commitment for $123.5 million in debtor-in-possession financing from its existing lenders, consisting of approximately $23.5 million new money subfacility and a roll-up of approximately $100 million of commitments under the company’s existing revolving credit facility. Upon court approval, this new financing, combined with cash generated from the company’s ongoing operations, is expected to be used to support the business throughout the sale process as Shiloh continues to take steps to address the ongoing challenges related to OEM production shutdowns due to COVID-19 that have affected the automotive sector in recent months.
