Lehman Brothers Merchant Banking has agreed to acquire healthcare services company Angelica for $209.7 million (€133 million).
Lehman will pay $22 per share in cash for the company, representing a 33.7 percent premium over the May 21 closing share price of $16.45. The deal is expected to close in late summer, after which Angelica’s stock will be de-listed.
The deal will be financed by equity from Lehman Brothers Merchant Banking IV, a $3.3 billion fund that closed last summer, and fully-underwritten, committed debt-financing composed of a senior credit facility and senior subordinated notes. Regions Business Capital is providing senior debt and Apollo Investment, an arm of Apollo Global Management, is supplying mezzanine financing.
The deal also includes a break fee payable by Lehman Brothers Merchant Banking or Angelica in the event of failure to close, ranging from $3.5 million to $9 million, “depending on the reason for failure”, the firms said in a statement.
Angelica provides textile rental and linen-laundry services to the healthcare industry. Under pressure from its shareholders, the firm hired investment bank Morgan Joseph to begin a public sale process last September.
“We are committed to building Angelica's business in partnership with management, focused on growth organically as well as by acquisition,” Lehman managing director Jon Mattson said in a statement. “The company is by far the largest player in a fragmented, non-cyclical and growing industry and its impeccable service has received significant praise from customers.“
Angelica’s largest shareholder, hedge fund Steel Partners II, has entered into a voting agreement supporting Lehman’s proposed acquisition.