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Wednesday, 12/15/2021 3:57:47 AM

Wednesday, December 15, 2021 3:57:47 AM

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$ARCW ARC Group Worldwide, Inc. Announces Sale of All Assets and Strategic Business Pivot
Press Release | 12/13/2021
DELAND, FL / ACCESSWIRE / December 13, 2021 / ARC Group Worldwide, Inc. ("ARC" or the "Company") (OTC Markets:ARCW), a leading global provider of advanced manufacturing, today announced that the Board of Directors has proposed to sell all of the Company's current operating businesses and assets (the "Legacy Business Sale"). The Company further announced that it plans to acquire RM2 International S.A. ("RM2"), a Luxembourg Socit Anonyme which has developed a type of composite pallet to replace wooden pallets that includes "smart" Internet of Things or ("IoT") technologies to improve logistics. RM2 is targeting industries such as food and other industries where hygiene is of extreme importance.

RM2 launched the smart pallet revolution by embedding autonomous IoT sensor technology in its logistically-optimized, hygienic BLOCKPal composite pallets. IoT sensor data are transmitted to the cloud via the LTE-M network, making visible the pallet's location and condition both indoors and in transit without requiring any additional hardware or information technology development. RM2 ELIoT®, the RM2 cloud-based supply chain intelligence platform, captures and contextualizes location, temperature, shock, and event data, giving customers end-to-end supply chain visibility and clear, actionable insights in real time. RM2 issues, retrieves, and sanitizes more than 1.5 million of its hygienic IoT pallets annually through a nationwide network of over 30 service facilities in a cost-effective, scalable, and environmentally sustainable pallet pooling system. To date, RM2 has invested more than $60 million into its research and development initiatives.

Global demand for pallets is estimated to be 9.1 billion units by 2024. Part of this demand is being met by suppliers with the Pallet-as-a-Service model, where pallets are leased, pooled, bought back or recycled (as opposed to purchased and owned outright by customers). The potential Pallet-as-a-Service market in the US currently is estimated to represent 224 million units and it is currently served by approximately 104 million pallets, the majority of which are wooden. Non-wooden pallets are increasingly finding favor with end-users. To cite a few examples, a leading poultry processor has disallowed wooden pallets from its suppliers, a large big-box retailer has announced a non-wood initiative and the cost of shipping pallets cross-border has risen as importers are increasingly responsible for ensuring pallets are free of pathogens. Single- or limited-use wooden pallets create environmental issues and are unhygienic and difficult to clean. These factors combine to create increasing demand for robust, reusable, hygienic, ecologically friendly and cost-effective pallets like the RM2 BLOCKPal.

Mr. Alan Quasha, Chairman of ARC, stated, "RM2 is in the process of deploying their innovative and proprietary IoT technologies that have the potential to revolutionize durability, dependability, security and digital communications to create transformative efficiencies across the entire continuum of global logistics. We consequently believe undertaking the Legacy Business Sale and pivoting to acquire RM2 can unlock exceptional value for ARC shareholders."

Mr. R. Ian Molson, Chairman of RM2 said, "We are delighted with the opportunity to partner with ARC in a manner that we believe will accelerate the dynamic growth and expansion of the RM2 business."

The Company plans to effectuate the acquisition of RM2 in a share exchange transaction with the principal shareholders of RM2, pursuant to which the shareholders of ARC immediately prior to the transaction will own, in the aggregate, approximately 25.0% to 30.0% of the combined common stock of the Company after closing the RM2 acquisition, subject to adjustments with respect to treatment of outstanding options and attainment of certain RM2 performance objectives.

The Company has committed to apply approximately $30 million in anticipated net proceeds resulting from the Legacy Business Sale to the business and operations of RM2.

As part of a series of transactions related to the acquisition of RM2 by ARC, a group of existing and new investors to RM2, including PMB Invest Fund I SCSp, Everest Hill Group Inc. and two other prominent investors, are expected to invest in the aggregate approximately $20 million into RM2 to fund the Company's growth.

ARC has established an independent committee of directors to ascertain the fairness of the terms of the Legacy Business Sale and the RM2 acquisition. ARC does not expect to make any dividends, distributions or payments to ARC or RM2 shareholders in connection with the closing of the Legacy Business Sale and RM2 acquisition transactions.

The Legacy Business Sale was initiated pursuant to an assessment of strategic alternatives by the Board, as previously announced by the Company on April 5, 2021. The proposal to consummate the Legacy Business Sale is expected to be presented for the vote of the ARC shareholders on January 18, 2022 at the ARC annual meeting of shareholders. All ARC shareholders of record as of December 20, 2021 will have the right to vote at the annual meeting. The Company plans to distribute the formal notice of the annual meeting and an accompanying proxy statement on or about January 4, 2022. The ARC proxy statement will contain detailed information regarding the proposed Legacy Business Sale. The proxy statement will also contain further disclosures regarding RM2. The gross sale price for the Legacy Business Sale is expected to be $45 million. After giving effect to the repayment of outstanding indebtedness and mandatory redemption of preferred stock, the Company expects to retain approximately $30 million in net proceeds from the Legacy Business Sale transaction.

The Legacy Business Sale price was determined pursuant to an auction undertaken by Imperial Capital, LLC that included solicitations to over 150 prospective bidders. The only bid received by the Company was in the amount of $45 million that was also subject to numerous contingencies (the "Bid"). The Company's majority stockholder, Everest Hill Group Inc., made a matching offer to purchase the Legacy Businesses for the same cash Bid price, with fewer contingencies, thus providing higher likelihood that the transaction will close. The Board of Directors provisionally determined to proceed with the offer from Everest Hill Group Inc.

The closings of the Legacy Business Sale and acquisition of RM2 are each subject to delivery of fairness opinions by independent valuators for each of the transactions as well as the recommendation of the committee of independent directors to proceed with the transactions, among other closing conditions. Subject to the approval by the ARC shareholders at the annual meeting, the Company plans to consummate the Legacy Business Sale and the RM2 acquisition on or about January 31, 2022.

About RM2

RM2 launched the smart reusable pallet revolution by embedding autonomous IoT sensor technology in its logistically optimized, hygienic BLOCKPal composite pallets. Its principal shareholders include Richard Cashin (the president of One Equity Partners LLC), QRM2 Holdings Ltd., (an entity controlled by the Quasha family), Polygon Global Partners, LLP (a global investment firm) and R. Ian Molson (a private investor). The CEO of RM2 is Kevin Mazula. Kevin Mazula has over 25 years of executive management experience, successfully leading growing businesses across a range of industries and geographies. He joined RM2 as Chief Operating Officer in April 2016 and became Chief Executive Officer in August 2017.

Prior to joining RM2, Mr. Mazula served as Chief Commercial Officer at PRIMUS Technologies and as a Senior Vice President of Xerox, where he led growth strategy and global productivity and cost competitiveness initiatives, respectively. Prior to these roles, Kevin served as Vice President of Global Business Units at Jabil, where he led the company's Telecom and Networking business. He also founded Jabil's Energy Management business, establishing the company's leadership position in Smart Metering and the Smart Grid. Mr. Mazula began his career at General Electric, holding leadership roles in engineering, operations, and program management.

Mr. Mazula is a member of the Executive Board of the Reusable Packaging Association, a non-profit trade organization focused on achieving sustainability through the reuse of packaging systems. He graduated with honors from the Wharton School where he earned his MBA in International Finance. As a Lauder Fellow, he was also awarded a MA in International Studies from the University of Pennsylvania. Mr. Mazula earned his undergraduate degree in Mechanical Engineering from the Massachusetts Institute of Technology. To learn more about RM2:

About ARC

ARC Group Worldwide, Inc. (OTC PINK:ARCW) is a global advanced manufacturing service provider. Founded in 1987, the Company offers its customers a portfolio of advanced manufacturing technologies and capabilities to improve the efficiency of traditional manufacturing processes and accelerate time to market. In addition to metal injection molding, ARC has significant expertise in prototyping, advanced tooling, automation, machining, plastic injection molding, lean manufacturing, and robotics. ARC's mission is to bring innovation and technology to manufacturing. Learn more at

Caveats & Disclaimers

This release relates to the proposed Legacy Business Sale and RM2 acquisition transactions of ARC. This release is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. In connection with the proposed Legacy Business Sale and RM2 acquisition transactions, ARC will post its notice of annual meeting and proxy statement together with other relevant materials on the ARC website and disseminate materials via the OTC Disclosure & News Service (the "Proxy Statement"). This release is not a substitute for the Proxy Statement or any other document that ARC may post or disseminate or send to its shareholders in connection with the proposed Legacy Business Sale and RM2 acquisition transactions. No assurances or guarantees are intended or implied in this release with respect to actual outcomes of the prospective Legacy Business Sale or the RM2 acquisition transactions. BEFORE MAKING ANY VOTING DECISION, SHAREHOLDERS OF ARC ARE URGED TO READ ALL RELEVANT DOCUMENTS IN THEIR ENTIRETY WHEN THEY ARE MADE AVAILABLE, INCLUDING THE PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. Investors and security holders will be able to obtain the documents (when available) free of charge on the ARC website, and the OTC Markets Disclosure & News Service site for ARC at

Forward Looking Statements

ForwardLooking Statements This release includes certain forwardlooking statements and projections. Such statements are subject to risks and uncertainties that could cause results to differ materially from the Company's and RM2's expectations. While the Company and RM2 make these statements in good faith, neither the Company nor RM2 nor their respective management can guarantee that anticipated future results will be achieved. Neither the Company nor RM2 assumes any obligation to publicly update or revise any forwardlooking statements made herein or any other forwardlooking statements made by the Company or RM2, whether as a result of new information, future events, or otherwise. All forwardlooking statements attributable to the Company or RM2 or persons acting on behalf of the Company or RM2 are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise publicly any forwardlooking statements, whether as a result of new information, future events or otherwise.


Investor Relations
Phone: (303) 4675236

SOURCE: ARC Group Worldwide, Inc.

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