Grouper Holdings LLC, a subsidiary of private equity firm MiddleGround Capital LLC, will acquire lightweight auto parts and equipment manufacturer Shiloh Industries Inc. for $218 million in cash.

Simultaneously, Shiloh filed for Chapter 11 bankruptcy protection in 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.

Grouper signed a stalking horse stock and asset purchase agreement with Shiloh pursuant to which it will acquire substantially all of its assets, including the equity interests of certain of its direct and indirect subsidiaries.

The deal is subject to working capital and net debt adjustments and assumption of certain liabilities of Shiloh, in addition to higher offers, court approval and other customary conditions.

Shiloh's operating entities outside the U.S. are included in the agreement with MiddleGround but are not part of the court-supervised process, the company said. The company's operations in Asia, Europe and Mexico are expected to continue as normal, it added.

Shiloh said it received a commitment for $123.5 million in debtor-in-possession financing from its existing lenders, including $100 million from an existing revolving credit facility.

Jones Day and Houlihan Lokey Capital Inc. are acting as legal counsel and financial adviser to Shiloh, respectively, while Ernst & Young LLP is its restructuring adviser. Baker McKenzie LLP is working as legal counsel to MiddleGround.