Angelica Dumps Dividend For Acquisition

Here’s something new. Angelica Corp, which is owned by the former Lehman Brothers Merchant Banking, has pulled its planned dividend deal.

Instead, Angelica, which provides outsourced linen management services to the U.S. healthcare industry, has told its lenders that it’s pursuing an acquisition, according to my compadres at Thomson Reuters Loan Pricing Corp.

Last week, Angelica was in the market for a $185 million loan that was three times oversubscribed, LPC said. Macquarie Capital was leading sale of the loan, which was intended to pay a dividend to shareholders and to refinance existing debt, LPC said.

The deal is now off, which is surprising since some companies recently are raising loans to pay dividends to their PE shareholders. Last week, Dunkin’ Brands, which is owned by Bain Capital, the Carlyle Group and THL Partners, said it was raising $2 billion that will be partly used to pay a dividend to its shareholders. Getty Images, which is owned by Hellman & Friedman, is also in the market for a $1.27 billion loan to partly fund a special dividend of $495 million to its shareholders.

Officials for Angelica couldn’t be reached for comment.

Lehman Brothers Merchant Banking acquired Angelica in 2008 for roughly $210 million. In 2009, the Lehman unit spun out from the failing parent and was jointly acquired by its management team and Reinet Investments, a Luxembourg-based investment company, according to a statement from that time.

The new entity was named Trilantic Capital Partners. The PE firm focuses on business services, consumer, energy and financial services. Trilantic is currently investing from its fourth fund, which raised $2.6 billion in 2007.

Trilantic couldn’t be reached for comment.