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

In an amended 13D filing on Angelica Corp. (NYSE: AGL), 9.8% holder Pirate Capital, which in the past has urged the company to hire a banker for a sale, disclosed a new letter sent to the Board of Directors.

In the letter the firm reiterated their disappointment with the weak operating results of Angelica, blaming management, and urged management to be more accommodative and open to utilizing all strategic alternatives. The firm said it will closely monitor the company.

NOTE: Nothing new here, but I need to ask - Is Tom Hudson at Pirate getting his mojo back after a terrible last 9-12 months. We are seeing more and more from him.

Copy of Letter:

Dear Members of the Board:

We feel compelled to reiterate in the strongest terms our disappointment with the weak operating results of Angelica Corporation (the "Company") and the anemic performance of the Company's stock during the past few years. As we made clear in our July 2, 2007 letter to the Board, we believe it is in both the shareholders' and the Company's interest for management to keenly focus on following the most optimal strategy to unlock value for shareholders. We want to make clear that we view Angelica's management team to be solely responsible for the Company's substandard operating results over recent years (2003 - present),which we believe to have been a direct contributor to Angelica's stock price underperformance. Contextually, we want to impress upon the Board that Pirate remains a beneficial owner of Angelica stock, with approximately 935,000 shares, or almost 10% of Angelica's outstanding shares. On the other hand, executive officers and directors beneficially own just over 260,000 shares (including restricted stock units), in the aggregate, and have been granted, without purchase, options on just over 440,000 shares, based on the Company's latest proxy statement. Clearly, based on our ownership, we believe that we are more closely aligned with shareholder interests than Angelica's management.

Given the difficulties management has experienced in fostering growth, we strongly believe management should be more accommodative and open to utilizing all strategic alternatives. The greatest area of consternation to us, as the second largest shareholder in Angelica, is the disconnect, or the meaningful valuation gap, between the aggregate price that Angelica paid for the 11 bolt-on acquisitions made between 2003 and 2006, which we understand to be in excess of$125 million, or approximately 1x sales, and the current market valuation for Angelica, which closed last night at $22.36 per share, or just over 0.5x fiscal2006 total gross sales for Angelica. Separately, given the proximity of Angelica's laundry facilities relative to each other, we would also ask the Board to consider sales of assets across regions.

Going forward, we will closely follow the Company's operating results and look forward with anticipation to management's pronouncement of strategies that will further shareholder value. Finally, as a significant holder of Angelica stock,make no mistake about it, we will continue to be vigilant in support of shareholder interests.

We look forward to your full cooperation in effecting the best outcome for shareholders.

Thomas R. Hudson Jr.

Large Angelica (AGL) Holder Pirate Capital Urges Co Hire Banker For a Sale

In an amended 13D filing on Angelica Corp. (NYSE: AGL), 9.8% holder Pirate Capital disclosed a letter to the board of directors, among other things, encouraging the board to take immediate steps to unlock long-term shareholder value by retaining an investment banking firm to explore all strategic alternatives (outside the ordinary course of business), including the sale of the Issuer, sales of assets or another extraordinary transaction.

Pirate Capital also indicated that it may have no recourse but to nominate a slate of directors at the upcoming annual shareholders’ meeting.

Pirate Capital also demanded the opportunity to examine and copy certain books, records and documents of the Issuer pursuant to Missouri law.

A Copy of the Letter:

Dear Members of the Board:

Pirate Capital LLC, as the investment advisor to Jolly Roger Fund LP and Jolly Roger Offshore Fund LTD, is the beneficial owner of 935,147 shares of the common stock of Angelica Corporation (“Angelica” or the “Company”). For the past several years, Angelica’s management has failed to improve its operating results, and in fact its net income has declined precipitously, from $11.029 million and $10.743 million in fiscal 2003 and 2004, respectively, to $2.319 million and $3.272 million, respectively in fiscal 2005 and 2006. We believe this failure has significantly hampered value generation for shareholders. This fact is reflected by what we believe to be the significant underperformance of Angelica’s stock price. Since June 27, 2003, Angelica shares have had a cumulative annual growth rate of 5.1% versus a cumulative annual growth rate of 11.4% for the S&P 500, and since the beginning of the year, Angelica shares have fallen by 19.5%, while the S&P 500 has risen over 6.2% - A PERFORMANCE GAP OF OVER 2,500 bps.1

Management has tried to paint a picture to investors that the Company has been building traction in turning around its business and that Angelica is on track to reach management’s goals for organic growth. In April of 2006, management said it anticipated the Company’s organic growth rate to increase to 7% to 10% over the next few quarters, while actual organic growth rates for the 3rd and 4th quarters of 2006 and 1st quarter of 2007 were 0.2%, 0.6% and 0.7%, respectively. More importantly, we don’t believe management has laid out for shareholders a cogent roadmap of how to achieve its targets. As the second largest shareholder of Angelica shares, with almost 10% of the outstanding stock, we can flatly state that our patience has been exhausted with management’s seeming inability to execute and deliver adequate shareholder value.

Because of the paucity of success in generating results and what we believe to be a lack of a clearly articulated vision by management for delivery of the necessary organic growth, we ask that you, the board of directors, immediately implement appropriate strategic initiatives. Specifically, we, as a substantial holder of Angelica stock, demand that the Company engage a nationally recognized investment banking firm to explore all strategic alternatives to increase shareholder value, including, but not limited to, the sale of the Company, sales of assets, or another extraordinary transaction, and that the board of directors publicly identify the investment banking firm and its mandate. Please also be on notice that we may have no recourse but to nominate a slate of directors for election at the upcoming annual shareholders’ meeting.

We look forward to your full cooperation in effecting the best outcome for shareholders.

Sincerely,

Thomas R. Hudson Jr.

Manager