Pirate Capital Again Urges Angelica (AGL) To Sell

In an amended 13D filing on Angelica Corp. (NYSE: AGL), 9.8% holder Pirate Capital disclosed a new letter to the board of directors reiterating their demand that the company retain the services of a nationally recognized investment banking firm.

In the letter Pirate Capital's Manager, Thomas R. Hudson Jr., said, "To clarify our position and to further highlight our intent to continue to champion the interests of shareholders of Angelica Corporation, we feel that we must further reiterate our demand that the board promptly retain the services of a nationally recognized investment banking firm for the purpose of effecting a sale of the Company, through sales of assets, an extraordinary transaction or otherwise, and to publicly identify the investment banking firm and its mandate. If this demand is not promptly met, we intend to nominate one or more persons to the Company's board at the upcoming annual shareholders' meeting."

A Copy of the Letter:

Dear Members of the Board:

To clarify our position and to further highlight our intent to continue to champion the interests of shareholders of Angelica Corporation ("Angelica" orthe "Company"), we feel that we must further reiterate our demand that the board promptly retain the services of a nationally recognized investment banking firm for the purpose of effecting a sale of the Company, through sales of assets, an extraordinary transaction or otherwise, and to publicly identify the investment banking firm and its mandate. If this demand is not promptly met, we intend to nominate one or more persons to the Company's board at the upcoming annual shareholders' meeting.

Management undertook a series of acquisitions between 2003 and 2006, which we understand cost in excess of $125 million, or approximately 1x sales, while the Company's shares are currently trading at approximately only 0.5x sales. As such, we believe there remains a serious disconnect. In our opinion, either there was considerable value dissolution in rolling up the previous acquisitions, or Angelica greatly overpaid for the acquisitions. If a 1x sales metric is applied to Angelica's current gross sales level, even after adjusting for net debt and other factors, the implied valuation for Angelica based on that metric approaches $35 per share. If we account for the valuation of Angelica based on the multiple of sales metric and an Enterprise Value-to-EBITDA metric,we arrive at an average valuation of approximately $31 per share. At $22.24 per share, last night's closing price of Angelica, the stock continues to trade well below what we estimate as the intrinsic value of the Company.

Over the past three years, Angelica's management team has been afforded ample time and opportunity to deliver growth and rejuvenate the Company as an on-going concern, but has demonstrated little success in this respect. We believe that the investigation of the sale of Angelica, led by a nationally recognized investment bank, will confer the most sensible strategy for delivering optimal shareholder value. We hope that you as the board, elected to uphold the interests of shareholders, will join us in pursuing our proposed strategies for the Company.

Sincerely,

Thomas R. Hudson Jr.

Manager