Shiloh Industries, Inc. Enters Into Stock and Asset Purchase Agreement with Grouper Holdings, LLC, a Subsidiary of MiddleGround Capital

Files Voluntary Chapter 11 Petitions to Facilitate Transaction

Secures $23.5 Million in DIP Financing to Support Operations

Company to Continue Providing Customers with Lightweighting, Noise & Vibration Solutions

VALLEY CITY, OHIO, August 30, 2020 – Shiloh Industries, Inc. (NASDAQ: SHLO) (the “Company” or “Shiloh”) an environmentally focused global supplier of lightweighting, noise and vibration solutions, announced today that it has entered into a stalking horse stock and asset purchase agreement with Grouper Holdings, LLC (“Grouper”), a subsidiary of MiddleGround Capital LLC (“MiddleGround”) pursuant to which Grouper will acquire substantially all of the Company’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, the Company and certain of its U.S. subsidiaries today filed voluntary petitions (the “Bankruptcy Petitions,” and the cases commenced thereby, the “Chapter 11 Cases”) 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. Accordingly, the proposed transaction with MiddleGround is subject to higher or otherwise better offers, Court approval and other customary conditions. The Company’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.

The Company’s operations will continue throughout the sale process and the Company 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 (“DIP”) 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.

“MiddleGround’s interest in Shiloh is a testament to the value they see in the highly competitive and universally innovative solutions we provide to our customers, driven by our hardworking, dedicated team,” said Cloyd J. Abruzzo, Interim chief executive officer of Shiloh. “The decision to enter this agreement with MiddleGround follows a thorough review of the options available to us, and we believe this transaction is the best path forward for Shiloh and all of our stakeholders. We look forward to building on our unique strengths as part of MiddleGround, while improving Shiloh’s financial position for the long term. In the meantime, we continue to work to promote safety and meet customer demand as the automotive industry recovers from the COVID-19 pandemic. We appreciate the support of our customers, partners, and above all, our employees as we take these important steps to position Shiloh for the future.”

“Shiloh has a unique and attractive portfolio of innovative, lightweighting products and technologies that enable OEMs to reduce on-vehicle weight without compromising strength, safety or performance,” said John Stewart, Partner at MiddleGround. “Despite recent market conditions, we see tremendous value in Shiloh’s business and differentiated product solutions serving the automotive sector. We look forward to working with the Shiloh team in this new chapter for the Company.”

In conjunction with the Chapter 11 filing, the Company has filed a number of customary motions with the Court seeking authorization to continue to support its operations during the court-supervised sale process, including authority to continue payment of employee wages and benefits without interruption and to honor customer commitments.

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.

The Company cautions that trading in its securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for these securities may bear little or no relationship to the actual recovery, if any, by the holders in the Chapter 11 Cases. The Company expects that its stockholders could experience a significant or complete loss on their investment, depending on the outcome of the Chapter 11 Cases.

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.

Investor Contact:

For inquiries, please contact our Investor Relations department at 1-646-378-2986 or at investors@shiloh.com.

Media Contact:

For inquiries, please contact Hilary Brazin at 1-734-738-1362 or at hilary.brazin@shiloh.com

or

Joele Frank, Wilkinson Brimmer Katcher
Andy Brimmer / Michael Freitag / Andrew Squire
212-355-4449

About Shiloh Industries, Inc.

Shiloh Industries, Inc. (NASDAQ: SHLO) 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 virus; (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 and the ability of the Company to remain listed on The NASDAQ Global Select Market; (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 30, 2020 and April 30, 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.

Sun, August 30, 2020