Groupe Germain announces $80 million investment to expand ALT Hotels in Canada

Groupe Germain today announced a transaction of more than $80 million in share capital in the Fonds d’investissement ALT Canada s.e.c. This major transaction, which includes private investors as well as institutional investors such as the Caisse de dépôt et placement du Québec, Investissement Québec, La Capitale Financial Group and Industrial Alliance, Insurance and Financial Services, will enable Groupe Germain to continue its expansion in Canada with the addition of eight hotels under the ALT banner.

“This injection of more than $80 million in share capital will enable us to continue expanding in Canada,” said Christiane and Jean-Yves Germain. “We would like to acknowledge the vision of our financial partners who, through their investments, enable us to realize our vision and extend the ALT banner across the country. We are fortunate to be able to rely on private partners who have put their trust in us at the outset and came on board in the initial fundraising stage. Coupled with this is the support of such investors as the Caisse de dépôt et placement du Québec, Investissement Québec, La Capitale Financial Group and Industrial Alliance,” they added.

“ALT Hotels are part of a sweeping trend in accommodation, especially in Europe and Asia, and our research has clearly shown that this type of accommodation, which offers a design-atmosphere-décor equation at the best possible price, is lacking in Canada’s hotel industry. Our investors have confidence in us to develop this hotel concept in Canada,” explained Christiane and Jean-Yves Germain.

We have been Groupe Germain’s partners since the outset and firmly believe that ALT Hotels respond to an emerging need in the Canadian hospitality market. Our faith in this project helped get the hotels up and running, and we’re proud to see this unique accommodation concept expand across the country,” said Pierre Thabet, representative for the initial investors’ group.

The Caisse, one of the Germain family’s long-standing partners, played a key role in this transaction. “For the Caisse, investing in ALT Hotels is a new opportunity to invest in a Québec company that is performing well. By focusing on innovation, Groupe Germain generated great success from its hotel offering. It has demonstrated a vision of leadership over the decades that has earned it an excellent position in its markets.  With this investment, the Caisse will support a Québec company’s growth while optimizing returns for its depositors,” said Normand Provost, Executive Vice-President Private Equity and Chief Operations Officer at the Caisse.

For Jacques Daoust, president and CEO of Investissement Québec, “participation in Groupe Germain’s expansion project demonstrates Investissement Québec’s capacity to provide flexible financing that is adapted to companies’ needs, while contributing to generating economic benefits. The project developed by Groupe Germain will create numerous direct and indirect jobs, and will contribute to creating a new Quebec leader in a promising niche of the hospitality and tourism industry.”

"La Capitale Financial Group is delighted to be associated with this $80M venture involving Groupe Germain. The stability and reputation of Groupe Germain are well suited to our investment objectives, which target quality investments in a variety of industries for the benefit of our Mutual members. The business plan, competitive nature and distinctive characteristics of the service offering developed by Groupe Germain's team of presidents make it a safe investment that is in line with La Capitale's long-term investment strategy, which embodies caution and thoroughness," observed René Rouleau, Chairman of the Board and Chief Executive Officer of La Capitale Financial Group.

“Industrial Alliance supports the Canada-wide expansion of the ALT banner, because Groupe Germain is a high-profile player in the hotel industry, with solid experience and high credibility in this sector. Moreover, the company has already proven itself.  It has an enviable track record of success and has all the assets it needs to ensure the success of this major project,” said Michel Tremblay, executive vice-president, investments, at Industrial Alliance.

ABOUT GROUPE GERMAIN

A family-run Quebec company, held in partnership with Groupe HDG (Holding Daniel Gauthier), Groupe Germain Hospitality owns and operates five Le Germain boutique hotels—one each in Quebec City, Montreal and Calgary, and two in Toronto. Groupe Germain Hospitality also owns and operates two ALT Hotels, in Montreal (Quartier DIX30) and Quebec City. Four other ALT Hotels are currently under development: at Toronto's Pearson International Airport, in downtown Winnipeg, at Stanfield International Airport in Halifax and a second in the Montreal area. Groupe Germain Hospitality is recognized for the unrivalled hospitality and sophisticated style that characterizes its hotels. Recipient of numerous prestigious awards, Groupe Germain has recently received the Pinnacle Award, in the category Regional Company of the Year. The Pinnacle Awards recognize the full spectrum of achievements in the Canada’s hospitality industry. For more information: www.groupegermain.com.

ABOUT THE CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC

The Caisse de dépôt et placement du Québec is a financial institution that manages funds primarily for public and private pension and insurance plans. As at December 31, 2010, it held $151.7 billion in net assets. As one of Canada’s leading institutional fund managers, the Caisse invests in major financial markets, private equity and real estate. For more information: www.cdpq.com.

ABOUT INVESTISSEMENT QUÉBEC

Investissement Québec's mission is to foster the growth of investment in Quebec, thereby contributing to economic development and job creation in every region. The Corporation offers businesses a full range of financial solutions, including loans, loan guarantees and equity investments, to support them at every stage of their development. It is also responsible for administering tax measures and prospecting for foreign investment.

ABOUT LA CAPITALE FINANCIAL GROUP

La Capitale Financial Group has a strong presence in Quebec and throughout Canada. With its 2,900 employees and partners and guided by the values of mutualism on which it was founded, La Capitale works with clients to build, protect and value what they feel counts for their financial security.   It offers insurance products and financial services to the general public as well as to Quebec's public service employees. With assets of $3.8 billion, La Capitale occupies a choice position among leading insurers in Canada. For more information:  www.lacapitale.com

ABOUT INDUSTRIAL ALLIANCE

Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. is a life and health insurance company with operations in all regions of Canada as well as in the United States. It offers a wide range of life and health insurance products, savings and retirement plans, RRSPs, mutual and segregated funds, securities, auto and home insurance, mortgage loans and other financial products and services for both individuals and groups. The fourth largest life and health insurance company in Canada, Industrial Alliance contributes to the financial security of over three million Canadians, employs more than 4,000 people and manages and administers more than $70 billion in assets. Industrial Alliance stock is listed on the Toronto Stock Exchange under the ticker symbol IAG. For more information: www.inalco.com