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Tuesday, October 4, 2022

Industrial Alliance acquires BLC-Edmond de Rothschild Asset Management

Date: Thursday, November 4, 2004

Laurentian Bank and Industrial Alliance Insurance and Financial Services Inc. announced today that they have signed an agreement in principle for Industrial Alliance to acquire all of the shares of BLC-Edmond de Rothschild Asset Management inc., currently held by Laurentian Bank and La Compagnie financière Edmond de Rothschild Banque. The deal includes a 10-year exclusive distribution agreement between the two companies that will see Laurentian Bank distribute R Funds acquired by Industrial Alliance to its clients, along with the Industrial Alliance mutual funds. BLC-Edmond de Rothschild specializes in mutual fund management, particularly R Funds, private wealth management and institutional portfolio management. Through the deal, Industrial Alliance will become the manufacturer of the R Funds family, in addition to acting as manager of the company's institutional and wealth management portfolios. Laurentian Bank clients can continue to hold R Funds and can still purchase these funds from their Laurentian Bank financial advisors. Terms of the agreement include an initial payment of $65 million at the time of conclusion of the transaction, and a final amount of $8 million at the end of the fifth year. The initial amount is subject to a recovery clause that can reach up to $28 million within the first five years if certain conditions are not met. The final amount is also subject to certain conditions. At September 30, 2004, BLC-Edmond de Rothschild managed assets of $902 million in mutual funds, $144 million in private wealth management and $704 million in institutional management for a total of $1.75 billion. “We are entrusting the manufacturing of the funds to our new partner so that we can concentrate on distributing these funds in our branch network, an area in which we have very strong capacities. We can thus offer our clients the same mutual fund families, while benefiting from the Industrial Alliance support team,” explained Raymond McManus, President and CEO of Laurentian Bank, in a release. “This transaction will enable us to quickly expand our fund family and will provide us with immediate scale in this sector. While maintaining our focus on the broad independent advisory channel, this transaction grants us access to a new distribution network, a banking network made up of experienced advisors, which is perfectly in line with our distribution strategy, whose success rests on multiple, diversified networks,” said Yvon Charest, president and CEO of Industrial Alliance. This is the ninth transaction Industrial Alliance has concluded in the wealth management sector in the past four years. The deal is scheduled to be finalized as early as December 22, 2004, subject to regulatory approval and due diligence.